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VAT Registration - KSA


VAT Registration - KSA

Business owners in the KSA have started registering for VAT from October, 2017. This guide explains the process involved in registering your business for VAT.

This section will cover the following topics:

Who should register under VAT?

The thresholds for businesses to register for VAT are based on the value of their taxable supplies, which include standard-rated supplies, zero-rated supplies, reverse charges received, and imported goods.

Businesses that make an annual taxable supply of goods and services greater than 375,000 SAR are required to register for VAT with the GAZT (General Authority for Zakat and Tax). The mandatory registration threshold is calculated on the basis of the taxable turnover in either the past twelve months or the upcoming twelve months.

Voluntary registration provides significant benefits for companies, since it allows the deduction of input tax. There are two groups for whom VAT is optional: 

Businesses generating less than 187,500 SAR annual revenue, and businesses that provide goods and services which are exempt from VAT, cannot register for VAT.

Non-KSA resident registration

Non-KSA residents who make taxable sales and purchases in the Kingdom are required to register for and pay VAT. In order to register for VAT, non-resident businesses must appoint a tax representative based in KSA.

Once the representative is approved by GAZT, the representative will be able to file VAT returns, make VAT payments, and correspond with GAZT on the taxpayer’s behalf. So if the business fails to pay tax for an extended period of time, the tax representative may be required to pay it.

Each non-KSA business should provide the following details of the tax representative: 

VAT group registration

Two or more legal people are allowed to register as a group if the same entity or individual owns at least 50% or more than the other group members. These groups should apply using GAZT’s electronic application form. 

For a group to be eligible, the following conditions must be met: 

Once the group’s application is approved for registration, VAT will be calculated on a combined basis as follows:

Net VAT of the group = Combined output VAT of the group members - Combined input VAT of the group members

VAT registration database

A database containing the VAT registration numbers of suppliers and customers will be available in the GAZT portal. Business owners can use this database to verify the registration numbers of their suppliers or customers.

Registration deadlines

GAZT has already opened up VAT registration for businesses. The deadline for VAT registration depends on the annual taxable sales of the business:

Registration process

To initiate the registration process, the business owner should submit an application form. 

VAT registration application

An application should be filled by businesses registering under VAT. The form contains the following details:

The person applying for registration may be asked by the GAZT officials to provide documentation to validate the information furnished. The documents should be submitted within 20 days following the date of request.

Once the application is accepted by the GAZT officials, the applicant will receive a certificate of registration. This certificate will contain the TIN (Tax Identification Number) and the date on which registration takes effect.

Registration procedure

Businesses can register by logging on to the online VAT registration portal on GAZT website and following the procedure stated below.

This page contains instructions to help taxpayers with the registration process.

In the second page, the taxpayer must furnish details like:

Certain details like the business’s TIN (Tax Identification Number), CR (Commercial Registration number), and address are also listed. These details will be auto-filled by GAZT based on pre-existing records for each business.

The third page collects the following financial details, based on which the business’s VAT eligibility will be assessed:

Taxable non-KSA businesses must provide information regarding their designated tax representative in the Kingdom. 

Each non-KSA business should provide the following details about its tax representative:

Finally, the applicant should confirm the accuracy of the submitted information and provide their name and ID number.

Deregistration

Applications for deregistration should be submitted through the GAZT e-portal. The taxpayer will be asked to attach certain documents as evidence of their eligibility to deregister.

In these cases, the Authority will determine the date on which the deregistration will take effect.

A taxpayer can opt for deregistration if:

 

Source:



       
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