The Unified Agreement for VAT of the Cooperation Council for the Arab States of the Gulf, which was signed by the six member states of the Gulf Cooperation Council (GCC), requires signatories to enact domestic legislation introducing a 5% Value Added Tax (VAT) between January 1, 2018 and January 1, 2019.
Saudi Arabia and the United Arab Emirates will be the first GCC member states to introduce VAT, as of January 1, 2018. The remaining member states -- Kuwait, Qatar, Bahrain, and Oman -- are committed to introducing VAT in the course of 2018.
As part of this process, the Saudi Arabian General Authority for Zakat and Tax (GAZT) has opened a VAT registration portal. Some large companies, such as those already registered for other Saudi Arabian tax purposes, will be automatically registered for VAT by GAZT. However, taxpayers who are not automatically registered can now register for Saudi Arabian VAT, through the GAZT website, by clicking on the ‘log in’ icon.
Taxpayers that make, or intend to make, annual taxable supplies of goods and services in Saudi Arabia in excess of SAR375,000 are generally required to register for VAT by December 20, 2017. As of January 1, 2018, they must charge VAT on supplies and issue VAT invoices.
Taxpayers whose annual taxable turnover is, or is expected to be, between SAR375,000 and SAR1 million have until December 20, 2018 to register.
Taxpayers may voluntarily register for VAT if their annual taxable sales exceed, or are expected to exceed, SAR187,500.
Nonresidents who carry on economic activities, but have no fixed place of business in Saudi Arabia, are required to register if they are obligated to pay VAT in Saudi Arabia. The registration thresholds do not apply to them. They are not required to register, however, if the recipient accounts for the VAT under the reverse charge mechanism.
GAZT has issued a list of frequently asked questions covering a range of VAT related matters.
By Joanna Norland, Technical Tax Editor and Lee Hadnum, Freelance Editor, Bloomberg BNA
Access even more in-depth analysis and expertise with a free trial to the Premier International Tax Library.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)