GCC Indirect Tax Digest
August 4, 2021
Electronic invoicing by 4 December 2021
The first phase of electronic invoicing (e-invoicing) is expected to be implemented in the Kingdom of Saudi Arabia (KSA) by the end of this year.
As previously announced, there will be two major phases: (1) the Generation phase and (2) the Integration phase.
The go-live date for the first phase is 4 December 2021, and the go-live date for the second phase is 1 January 2023. The latter will be implemented in a phased roll-out, and ZATCA will inform the targeted/selected taxpayers six months before integrating with the Authority’s system.
The technical specifications documents referred to in the Implementation Resolution such as the Data Dictionary, XML Implementation Standard and Security Implementation Standards have also been released. Further, ZATCA has also issued the e-invoicing simplified guideline and FAQs.
Businesses in KSA should take action as a matter of priority to ensure that they are in compliance with the e-invoicing requirements by the applicable deadlines.
Compliance update - VAT return filing and pre-registration input tax claims
The due date for filing the first VAT return for the period ended 30 June 2021 was strictly 30 July 2021, for businesses registered under the first wave of registration.
We understand that as 30 July 2021 fell on a weekend, businesses were also allowed to file their first return on the next working day i.e. 1 August 2021. Businesses who have failed to file their VAT return by the due date could be subject to 1% additional tax and penalties, but the Oman Tax Authority (OTA) has indicated that they are prepared to take into account mitigating factors in this transitional period for VAT.
The OTA has introduced a taxpayer checklist along with the VAT return form – a Microsoft Excel-based file comprising of a comprehensive questionnaire and process guide, requiring transaction-level information to be submitted for those requesting refunds amongst other points. Following the steps of the Taxpayer Checklist is expected to be regarded as good practice on all VAT return forms going forward.
Separately, we understand that the OTA will accept that refund or credit requests for VAT incurred pre-registration can be made on the first VAT return filings – this will also be relevant for second wave VAT registrations, voluntary registrations and non-resident VAT registrations.
Extension of blanket approval for simplified tax invoicing
The OTA has also recently announced extension of the blanket approval for businesses to use simplified tax invoices until further notice. Businesses which are issuing simplified tax invoices are required to submit a letter to the OTA within three months from the date they start issuing simplified tax invoices, in the format provided by the OTA.
Additional guidance expected
We understand that the OTA is also finalizing industry and sector specific guides for Oil and Gas (in conjunction with the Ministry of Energy and Minerals) and for Financial Services (helped by the Oman Banks Association, the Central Bank of Oman, the Oman Capital Market Authority and others). We also understand that the OTA will be rolling out seminars, workshops and webinars in relation to VAT in the next few months.
This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.