Saudi Arabia’s General Authority of Zakat and Tax has reportedly announced that firms will only have until later this month to register for value added tax (VAT).
Saudi Gazette reports that the authority declared an August 26 registration deadline for firms with an annual turnover exceeding SAR375,000 ($100,000).
The kingdom, along with other members of the Gulf Cooperation Council, will implement the 5 per cent VAT rate on goods and services from January 1 next year.
The tax will apply to supplies, goods and services unless specifically exempted or zero-rated.
However, the approaching deadline comes as many businesses in the region are deemed unprepared for the implementation of VAT.
A survey of 330 respondents released last month by ACCA and Thomson Reuters showed 49 per cent of GCC businesses for unprepared for the tax and only 11 per cent understood the impact of VAT on their businesses.
In addition, only 18 per cent of respondents said their firm had sufficient resources for VAT implementation.
Earlier this month, the UAE issued a new tax procedures law regulating the collection of taxes. The emirate previously announced VAT registration for businesses with a turnover of more than Dhs375,000 would begin after June.
In the UAE, registration for firms with a turnover of less than Dhs375,000 is expected to begin after January 1, but businesses have the option of doing so sooner.
Each country can determine, which items will be exempt from the levy, with healthcare and basic food items likely to be zero rated across the region.
Professional services firm EY said in December that the tax could generate $25bn in annual revenues across the GCC