VAT Registration in Saudi Arabia - Intuit Management Consultancy Group
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VAT Registration in Saudi Arabia

BACKGROUND TO VAT IN SAUDI ARABIA

Value Added Tax (VAT) is an indirect tax levied on supplies. More than 150 countries around the world have already implemented the VAT. GCC have entered a treaty to introduce and implement VAT and Excise across the GCC to create a wider scope of revenues for the Government. Saudi Arabia has introduced VAT with effective from 1st January 2018. IMC has been operating in GCC for over 10 years. With a partnership in Saudi Arabia, IMC is closer to the customer with a better understanding of the Saudi Arabia Tax Laws and Practices. IMC can assist in advising on VAT implications for business and what systems and procedures need to be followed by companies. The laws have defined Input Vat, Output Vat and the Meaning of Supplies, Goodsand Services.

VAT Rates in Saudi Arabia

The standard rate for VAT is kept at 5% across GCC. All the supplies shall be subject to VAT at the rate of 5% if they do not fall under the zero rated or exempt categories. All the supplies of goods and services will be categorized into three categories for calculation of VAT liability:

Supplies chargeable at a Standard rate of 5%
The standard rate for VAT is kept at 5% across GCC. All the supplies shall be subject to VAT at the rate of 5% if they do not fall under the below two categories. Renting and Buying of commercial property is an example of supplies chargeable at 5%.

Zero-Rated Supplies
Necessary goods and services e.g. healthcare and education are kept under this category.

Exempt Supplies
The goods and services that will not be subject to VAT are exempt supplies. Local passenger transport and renting of residential property are kept under this category. It is important to note here that the companies providing exempt supplies shall not be required to register for VAT and cannot claim any input credit for the VAT paid on purchases.

VAT Advisory in Saudi Arabia

IMC is offering professional VAT advisory services in Saudi Arabia as the legal system of VAT has been introducedfrom January 1, 2018. The businesses need to determine the impact of VAT on all areas of operation, and this effect can be achieved through a detailed analysis of activities from a primary input to final output. The companies need to evaluate their financial structure to assess the impact of the VAT and should engage in training their staff to handle VAT based transactions.

VAT Implementation in Saudi Arabia

IMC has the best VAT consultants in Dubai who will perform checks to ascertain the fact on how the VAT can be infusedwith the client’s business structure.VAT classifies the levy of rates into three categories:The Standard rate of 5%, Zero-rate goods andExempt goods.Our experts provide the companies the necessary VAT support to classify their goods and services in the categories mentioned above and assess their impact.VAT shall impact the pricing structure and profit margins and is to be factored in all the invoices raised by businesses. A critical analysis will be required for this to ensure that business will face the least impact by preparing customized pre-and post VAT scenarios for every business. IMC’s VAT experts can assist you in the following ways:

Impact Analysis

  • Understanding the needs of client’s business and estimating the impact of VAT on the business
  • Preparing Pre and Post scenarios for ascertaining impact on business
  • Analysing various areas of positive or negative impact and the causes behind them
  • Providing accurate information for decision making

Assistance in Implementation

  • Advise client about various legal and procedural requirements
  • Checking and verifying the books and records as per the legal requirements
  • Prepare an implementation plan based on requirements of client
  • Registration with relevant Governmental authorities
  • Completing documentation and other requirements
  • Liaison with authorities and governmental bodies on behalf of client
  • Filing for VAT return or a refund of VAT credit.

VAT Training in Saudi Arabia

VAT training is the need of the hour as Saudi Arabia has implemented VAT from January 1st, 2018. IMC’s VAT experts provide excellent solutions of VAT training for your employees at all levels of management. This will ensure adequate understanding of VAT to the employees and will teach the procedures and protocols of the VAT.Training of staff and implementation of policies and procedures is crucial to the successful implementation of the VAT journey.

VAT Compliance in Saudi Arabia

According to the regulations of the VAT, a company needs to compulsorily register for VAT if the annual turnover of the company crossed a threshold. Since this is the first time VAT implementation in Saudi Arabia, the companies need to be prepared for the impact, procedures, implementation, and review. There is a need to monitor compliance and suggest improvements required in both systems and staff training.