KSA Guide: Tax Representative, VAT Fiscal Representative
With the advent of VAT in KSA, every business entity must register for VAT in accordance with executive rules and regulations given by the General Authority of Zakat and Tax (GAZT). There are detailed articles and procedures regarding VAT compliance, VAT filing, and VAT return as well as information on the implication of VAT on companies based on the service and industry they are operating in. However, it is difficult to comprehend and understand all the terms and procedures mentioned by GAZT, thus tax representative and VAT fiscal representative firms in KSA play a vital role here.
Aviaan Accounting has a very professional, trained, and certified staff of accountants who are dedicated to representing companies in all VAT and tax-related matters in KSA.
Who should register under VAT in KSA?
The first thing in VAT registration is to find out the category your company falls in. The business will pay VAT based on the value of their taxable supplies, which include standard-rated supplies, zero-rated supplies, reverse charges received, and imported goods.
- Mandatory registration: Organization that makes an annual taxable supply of goods and services greater than 375,000 SAR is required to register for VAT with the GAZT (General Authority for Zakat and Tax). This VAT registration threshold is calculated on the basis of the taxable turnover in either the past twelve months or the upcoming twelve months.
- Voluntary registration: All the businesses which make an annual taxable supply of goods and services greater than 187,500 SAR but less than 375,000 SAR are eligible to register voluntarily. Firms that have taxable sales greater than 375,000 SAR and exclusively sell zero-rated products (such as certain medical products, international transportation, and exports to non-GCC countries) can register voluntarily.
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.
VAT Fiscal Representation in KSA
Although VAT fiscal and tax representatives in KSA make the process of VAT registration and filing easier and simpler for its clients, however, it is not a mandatory requirement for a non-resident to appoint any specialized firm to manage VAT-related matters. It is still advisable to contact a professional VAT fiscal and Tax representative firm in KSA for handling the end-to-end VAT process since it involves a lot of procedural requirements which a non-resident tax-payer might not be familiar with. Other few points included in GAZT related to VAT Fiscal and Tax representative in KSA are:
- Guarantee for non-residents who do not choose to use a tax representative
- Less ambiguity on the zero-rating for export of services
- Comprehensive detail on eligible body refund and transitional intra-GCC rules.
VAT Refund in KSA
According to GAZT, there are three scenarios in which taxpayers in KSA are eligible for VAT refunds. In all three cases, the taxpayer needs to request a refund specifically. If not applied for VAT refund on time, the VAT amount is carried forward to the next tax period. Below are given the three situations:
- Net tax due is a negative amount: If the total VAT amount owed by a business is negative for a given tax period, the business is due to a refund.
- Excess VAT payment: In case a tax payer company has paid GAZT more than it owed, it can claim a VAT refund.
- VAT Credit balance: If a business has a positive balance in its VAT account, it can claim that amount as a refund.
Aviaan Accounting Offer Tax and VAT Fiscal Services in KSA
It is worth noting that there is a requirement that foreign taxpayers without fiscal representation need to appoint a local accountant for record-keeping but the clients will now be able to contact the tax authorities directly through the GAZT portal.
The non-domestic business entities operating in KSA will also need to set up a bank deposit or a bank guarantee with the GAZT to cover VAT obligations. This amount will be determined by the GAZT by considering approximately six months of VAT liabilities.
If you are concerned about how VAT and changes made by GAZT may impact your business, contact our expert and specialized staff. We offer:
- Customized Solution
- Timely and Accurate submitting VAT returns
- VAT registration
- Financial and Accounting Management
- Representation in KSA tax authorities