VAT Increase Guidelines pubslihed by GAZT

Ganesh NairGanesh Nair    21 May 2020
VAT Increase Guidelines pubslihed by GAZT

The General Authority of Tax and Zakat (GAZT) in Saudi Arabia has issued Guidelines in Arabic relating to VAT rate increase from current 5% to 15% w.e.f 01 July 2020.  English version should follow soon.

However, on a quick google translation, the following are the highlights:

  1. Contracts signed with Government bodies before 11 May 2020, the VAT Rate of 5% to continue for another year till 30 June 2021 (Grandfathering Provision);
  2. Contracts signed with Government bodies on or after 11 May 2020 to 30 June 2020, The date of supply will be taken into consideration for treatment of VAT i.e. 5% or 15%; for eg.,if goods supplied before 30 June 2020, then 5%, post 30 June 2020, 15%.
  3. Contracts signed between two VAT Registered entities before 11 May 2020, the VAT Rate of 5% to continue for another year till 30 June 2021 (Grandfathering Provision);
  4. Contracts signed between two VAT Registered entities on or after 11 May 2020 to 30 June 2020, The date of supply will be taken into consideration for treatment of VAT i.e. 5% or 15%; for eg.,if goods supplied before 30 June 2020, then 5%, post 30 June 2020, 15%.
  5. Tax Invoice if raised before 11 May 2020; and the date of supply is post 01 July 2020, VAT @5% applicable, provided the supply is made on or before 30 June 2021;
  6. Tax Invoice if raised between 11 May 2020 to 30 June 2020, The date of supply will be taken into consideration for treatment of VAT i.e. 5% or 15%, for eg.,if goods supplied before 30 June 2020, then 5%, post 30 June 2020 15%.

Note that these are high level translations, once we receive the English version,  there might be some changes and update shall follow.

You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax. 



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