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Zakat & VAT Registration in Saudi Arabia

05/11/2019

VAT or Value Added tax is the tax that is levied on the consumption of goods and services. VAT is one of the major indirect tax which is used around the world economies. VAT is also called consumption tax as the final brunt of the tax falls on the ultimate consumer who purchases or uses the goods and services. The tax is collected, managed and accounted by the businesses on behalf of the government.

Recently, the KSA joined the tax world from 1 January 2018. The rate of VAT is set up at 5%. The introduction of VAT in the KSA is going to act as a new source of income for the economy which will help the country to utilize more funds for the development of the facilities for the citizens of the country. various laws and procedures for the easy facilitation and management of the VAT were introduced. The Federal Tax Authority is the governing body for all the tax related matters. The businesses will collect tax from the customers and make the payment to the government in form of VAT returns and the government will make the refunds for the VAT paid to the

VAT Registration:

The General Authority of Zakat and Tax (GAZT) is responsible for managing the implementation, administration and enforcement of VAT in Saudi Arabia. 

Mandatory Registration
All companies, businesses or entities which make an annual taxable supply of goods and services in excess of SAR 1,000,000 have been legally required to register for VAT by 20th December 2017. However, all taxable persons whose annual taxable supplies exceed the mandatory Registration threshold of SAR 375,000 but do not exceed SAR 1,000,000 will be exempted from the requirement to register until 20th December 2018.

Voluntary Registration
Those which make an annual taxable supply of goods and services in excess of SAR 187,500 are eligible for voluntary Registration. Voluntary Registration provides significant benefits for the companies since it allows the deduction of input tax.

Registration of taxable persons not Resident in Saudi Arabia
Non-Residents, who carry on economic activities but have no fixed place of business or fixed establishment in Saudi Arabia, are required to register if they have the obligation to pay VAT in Saudi Arabia.

ARC Associates can help you with the services of Impact Assessment; we strive to guarantee that your business is well positioned for VAT. To build long-term relationships with our customers, we provide well-researched professional advice and effective solutions to all of their VAT-related issues.

ARC Associates helps you to: 

• Provide a comprehensive VAT impact assessment (free of charge)

• Equip your staff to be well equipped for VAT

• Recommend changes / updates to your accounting system

• Recommend changes to your invoice structure & other related documents

• Educate yourself on the VAT rates applied to every one of your revenue streams

• Advise on the impact of VAT on your current projects.

• Advise you on data maintenance to comply with VAT.

ARC Associates in have handled the VAT registration of many businesses. For more details regarding the registration for VAT and getting your business registered, get the best guidance and assistance at ARC Associates across Saudi Arabia.