15% VAT Hike Comes Into Effect In Saudi
Category: Saudi Arabia
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Saudi Arabia’s decision to raise the value-added tax (VAT) rate to 15 per cent was enforced on Wednesday on all goods and services subject to it in markets across the Kingdom, after a royal decree was issued on May 11, Saudi media reported Wednesday.

The Saudi General Authority of Zakat and Income called on all taxpayers who are registered in the value-added tax to verify the readiness of their facilities, and learn about all transitional provisions related to raising the tax rate, by reviewing the guidelines for transitional provisions related to raising the value-added tax rate.

The authority also urged citizens and residents to ascertain the items of the tax invoice, including store name, date of purchase, tax number, and value-added tax, calling for cooperation with and reporting any violation business if these elements are not available, through the website of the authority (gazt.gov.sa), and via the (VAT) application for smartphones.

The Zakat and Income Authority called on the taxpayers wishing to obtain more information about tax regulations in the Kingdom and to comply with its provisions, to visit the official website of the authority, or to communicate with the authority through the unified call center on the toll free number (19993), or through its customer care Twitter account.

What you need to know?

Earlier, the Saudi Customs has confirmed that e-commerce transactions of goods imported from outside Saudi Arabia will be subject to a 15 per cent VAT on or after 1 July.

On its twitter page, the General Authority of Customs said that all sales and purchases in e-stores that includes importing products to Saudi Arabia through customs will be subject to a VAT of 15 per cent if their import or consignment arrives on or after July1, 2020.

The adjusted tax applies to all supplies of taxable goods or services imported into the Kingdom.

Cost of living allowance

In early May, Saudi Arabia announced it would triple its VAT from 5 per cent to 15 per cent as part of measures to shore up its economy hit by the impact of Covid-19 and low oil prices.

The government also said it will suspend the cost of living allowance as part of the austerity steps.

Joanne Clarke, tax director at Pinsent Masons Middle East, said deals signed before July 1, will continue to avail of the transitional rules announced and explained by GAZT which, in some instances, relieves the application of the 15% until June 30, 2021.

Clarke added it is also important to remember that the “Tax Amnesty” in Saudi Arabia, announced as part of the COVID-19 tax relief measures, also comes to an end on June 30 and therefore businesses need to ensure to submit any Tax Disclosure to GAZT as soon as possible to mitigate the potential for tax penalties on historic errors.

Saudi Arabia is one of the most affected countries by the coronavirus in the middle east, where it has reported so far more than 190,823 infections and more than 1,649 deaths.

 

SOURCE : GULF NEWS

 

02 Jul, 2020 0 2871
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