KSA has published its final VAT law
Businesses should ensure registration within 30 days from 28 July 2017
The Kingdom of Saudi Arabia (KSA) has released its final Value Added Tax (VAT) law on the website of its official Gazette on Friday 28th of July.
Some of the key highlights are listed below:
- According to Article 2 and in alignment with the GCC VAT Framework Agreement, all imports into and supplies of goods and services in the KSA will be subject to VAT.
- According to Article 53, the VAT will become effective in the Kingdom from the beginning of the next fiscal year (1 January 2018).
- The standard VAT rate is 5%. However, in accordance with the GCC VAT treaty and Article 10 of the KSA VAT law, certain goods and services will be subject to zero rate or will be exempted from the VAT. This will be determined in the KSA Draft VAT Implementing Regulations.
- According to Article 53, All Persons liable to register for VAT purposes, shall register with the General Authority for Zakat and Tax (GAZT) within 30 days from the date of issuing the law (i.e 30 days from July 28, 2017).
- According to Article 41, businesses who fail to apply for the registration within the specified period will be fined SAR 10,000.
- According to Article 21, if an invoice is issued or a payment is made before the implementation or registration date but the actual supply of the goods and services is on or after the implementation or registration date, the VAT will be considered to be due.
- More detail on these and other provisions will be contained in the Implementing Regulations. GAZT is currently consulting with businesses on the content of these Regulations. Once finalized they will be published in the same manner as the KSA VAT Law.
For more information about the VAT implementation in KSA, please refer to our summary document.