KSA - GAZT issues new Guides on several VAT issues
GAZT issued new Guides on VAT listed below.
Input VAT Guide
GAZT issued an important Tax Deduction Guideline.
The purpose of this guideline is to provide additional clarification with respect to Input Tax deduction and the partial deduction method.
The guideline covered the eligibility for deduction and deduction of general overheads and non-attributable costs. In addition, the restricted Input Tax like private use and restricted categories of goods or services and prohibited Goods.
The Guide devotes attention also to documents and timing for VAT deduction and some special cases treatment like Pre-registration VAT and VAT incurred in other countries.
One of the main topics covered in this guideline is using of Alternative Methods including:
• Alternative Proportional Methods
• Applying for Alternative Method
• Direction by GAZT to use Alternative Method
Import and Export Guide
GAZT issued VAT Imports and Exports Guideline in September 2018, the guideline covered the treatment of VAT on imported goods and services including the import procedures, valuation of imports, exempted imports, imports of goods and service by non-taxable persons, receipt of services from a non-resident supplier, place of supply of services, reverse charge mechanism.
The guideline has separate section for exports of goods and services treatment like direct exports, Indirect exports, documentation to evidence export, supplies made after export clearance, place of supply of services.
In addition, the guideline presented transitional provisions related to import of goods from GCC states, export of Goods to GCC countries, services received from other GCC states, Services provided to other GCC states.
VAT Invoicing and Records Guide
GAZT issued a VAT Invoicing and Records Guideline.
The guideline covered Tax Invoice definition and details like Content of a Tax Invoice, Language, Currency, Details to be included on the Tax Invoice, Time of Issue for Tax Invoices.
Also covered Simplified Tax Invoice, Circumstances of Issuing a Simplified Tax Invoice. And, Special Circumstances like Self-billing Third party billing, Customer self-accounts for VAT, Profit margin billing.
And special section for Electronic Invoicing, Credit and debit notes, Record keeping.
VAT Guide for Economic Activity
GAZT issued also a VAT Guideline for Economic Activity covering the definition of economic activity and description for VAT purpose and registration obligations and Government bodies
Some specific cases arepresented like employees and provision of personal services, holding companies, dormant companies, and management companies within a group of companies, dormant company, holding company, management companies within the group, private associations and establishments, ownership of racing animals and other leisure investments.
Author: Hany Elnaggar, Head of Tax Saudi & Egypt regions – Ericsson (RMEA)
