Update on VAT in the Kingdom of Saudi Arabia

SEPTEMBER 2017

Saudi Arabia General Authority of Zakat and Tax (“GAZT”, or “the Authority”) has on 26 August 2017 released the final version of its implementing regulations of Value Added Tax (“VAT”) law. This comes after Saudi Arabia issued its VAT Law on 28 July 2017 (“the VAT Law”).  Saudi Arabia is the first country in the Gulf Corporation Council (“GCC”) to have issued its VAT law and regulations. 

VAT is an initiative agreed upon by GCC member states (comprising Saudi Arabia, Kuwait, United Arab Emirates, Oman, Bahrain and Qatar) to help improve the budgets of the states in view of the drop in oil prices. 

The VAT regulations issued by the Kingdom of Saudi Arabia (“the VAT regulations) consists of twelve chapters covering the following:

1. Definitions

 2. Taxable persons

3. Supplies of goods and services 

4. Place of supply

5. Exempt supplies

6. Zero rated supplies

7. Value of taxable supplies

8. Imports

9. Calculation of tax payable

10. Procedures and administration

11. Refunds

12. General provisions

BDO has therefore prepared this document to provide guidance to businesses on the updated VAT:

Please contact a member of our Zakat and Tax Team or your local BDO advisor with questions about VAT updates and its impact.