Saudi Arabia VAT registration deadline imminent
Businesses in Saudi Arabia must prepare for the upcoming VAT registration deadline of 20th December 2017.
This warning follows EY’s VAT seminars held in Riyadh, Jeddah and Al Khobar, attended by delegates from the private sector, aimed to better prepare businesses in Saudi Arabia across all sectors for the upcoming implementation of VAT.
“It is crucial that businesses in Saudi Arabia and across the GCC are prepared for the implementation of VAT. The seminar featured topics that will affect Saudi businesses. This included the processes for VAT registration, identifying taxable supplies, and determining the VAT rates on specific goods and services. January 2018 is fast approaching and businesses, as well as consumers, should be well-informed of what is required by them to ensure a smooth transition. The upcoming registration deadline is the next step towards its implementation,” said Finbarr Sexton, MENA Indirect Tax Leader, EY.
VAT registration is not mandatory for all businesses in Saudi Arabia or across the GCC. Businesses only need to register if the taxable supplies exceed, or are expected to exceed the annual mandatory amount of SAR 375,000 within twelve months of the registration date. If the taxable supplies of the business only exceed the voluntary registration threshold of SAR 187,500, registration is optional.
VAT will be applied at either at a standard rate of five per cent or at a zero rate (zero per cent). Standard rated supplies include all supplies of goods or services and imports in the KSA. Zero-rated goods and services are taxable at a rate of zero per cent, meaning a supplier making zero-rated supplies is able to recover the input VAT incurred in respect of those supplies.