KSA announces extension of the VAT amnesty to 30 September 2020

Further to our update published on 2 April 2020 on the tax amnesty measures launched by the General Authority of Zakat and Tax (GAZT) in the Kingdom of Saudi Arabia (KSA), the GAZT has recently announced that the initial amnesty period up to 30 June, will now be extended until 30 September 2020.  In particular, there is now a further chance for businesses that may have had a registration obligation to now register for VAT and submit their returns without any additional penalties. Also, businesses that were already registered can make use of the amnesty to make corrections of omissions or errors in previously filed returns.

A summary of tax amnesty scheme is as follows:
 
Eligibility and timeframe:

• These benefits are extended to all taxpayers who are registered or required to be registered under the KSA VAT legislation.
• This includes any non-resident person who is obligated to pay VAT in the KSA.

Late registration:

• For all entities that should have registered for VAT in KSA, no late registration penalties will be imposed for applications received by 30 September 2020. This applies to non-resident taxpayers as well.

 
Returns and voluntary disclosures:

• Any VAT return that should have been filed can now be filed without incurring a late filing penalty, up until 30 September 2020.  
• All taxpayers can make corrections on previously submitted VAT returns without incurring any penalties up until 30 September 2020.   
  • Taxpayers can apply to make payments for understated tax by installments. However, the request to pay by installments must be made by 30 September 2020. GAZT has confirmed that no penalty will be imposed until 30 September 2020, but it will calculate the late payment penalty for the unpaid portion starting from 1 October 2020 until the date of the actual payment.  
• VAT returns made during the previous period can also be amended without incurring penalties. 

Limitation:

• To claim the benefit under these announcements, all the additional liabilities should be received by the GAZT before 1 October 2020.
  
  

Next steps

It is unlikely, in our view, that the above measures will be extended beyond the end of September 2020. Therefore, we strongly suggest that taxpayers review their current and historic VAT position to ensure that their compliance and tax affairs are in order in good time. 

If you are already VAT registered, you should carefully consider reviewing your July and August VAT returns to take account of the [new] increase in the VAT rate to 15%. We can provide a thorough VAT return health-check, training and
other services, if so required.