This week the spotlight is on tax developments in Saudi Arabia, where the Kingdom’s General Authority of Zakat and Tax has approved the Implementing Regulations to the VAT Law. It comes as the Kingdom prepares to launch VAT on the 1 January 2018. The Regulations set out the scope of taxation for certain goods and services, explain registration rules and eligibility of businesses for VAT, zero-rated and exempted supplies, the treatment of imports and exports, amongst other things. Decision of the Board of Directors of the General Authority of Zakat and Tax No. 3839/1438 was Gazetted in Saudi Arabia Official Gazette, issue 4689.
In a related development, the Authority also announced it has extended the VAT registration deadline for small businesses by an additional year. Businesses whose annual taxable supplies of goods and services do not exceed one million Saudi riyals will be exempt from the requirement to register by 20 December 2017. They will have until 20 December 2018 to register now. All businesses whose annual taxable supplies exceeded 375,000 Riyals had been told they were required to register for VAT. However, companies who have an annual taxable supply of goods and services over 187,500 Riyals can choose to register or not for input tax deduction.