ADJUSTMENTS TO VAT ENTITLEMENT IN SAUDI ARABIA WILL BE IN EFFECT FROM NOVEMBER 1ST.

The Board of Directors of the Saudi Zakat, Tax, and Customs Authority approved amending the requirements of Article (20) of the executive rules for value-added tax, which deal with establishing the date of delivery and the tax payable in particular situations.

The regulation was amended to change the date of supply and entitlement to value-added tax on all supplies of goods or services made by establishments contracting with government agencies, according to contracts concluded with those agencies following the government competition and procurement system, so that the tax is due on the date of issuance.

The date of receiving the consideration for the supply or portion of it, whichever is earlier, to guarantee that the entity gets the tax due on the supply before declaring and paying it to the Authority in its periodic returns, in line with the rules of the competition system.

Muhammad Al-Jadaan, Chairman of the Board of Directors of the Zakat, Tax and Customs Authority and Minister of Finance, stressed that this decision is in line with the government’s desire to provide more opportunities for the private sector to expand, grow, and operate, as well as to make the business climate more conducive.

“The decision confirms the government’s continued efforts to strengthen the private sector’s role as the main engine of economic growth, as well as to support small and medium enterprises through a variety of initiatives and programs that contribute to increasing the private sector’s participation in economic development in the Kingdom,” Al-Jadaan said.

This amendment will take effect on November 1st, according to the Zakat, Tax and Customs Authority, who stressed that it is motivated by a desire to ensure that these establishments comply with the relevant provisions of the value-added tax system while also ensuring the continuity of taxpayers’ activities.