Saudi companies urged to file VAT returns by month-end

Saudi’s General Authority of Zakat and Tax has urged companies and entities registered for value added tax (VAT) to file their tax declaration for the month of April by Thursday, May 31.

Companies whose annual value of taxable goods and services exceeds SAR40m have to declare their returns every month, according to local media reports.

Meanwhile entities whose annual values of taxable goods and services are less than SAR40m are required to file their tax declarations every three months.

The tax authority emphasised that companies that failed to submit their declaration in time would face fines of between 5 per cent to 25 per cent of the value of tax that was due to be paid.

In addition, the penalty for not paying tax in any given month is equivalent to 5 per cent of the unpaid tax.

Saudi Arabia implemented the first phase of VAT from January 1 this year.

All companies with annual revenue exceeding SAR1m are required to register for the tax. After the first phase, companies with annual revenues of between SAR375,000 ($100,000) and SAR1m have until December 20, 2018 to register.

Read: VAT violators in Saudi face SAR10,000 fine

The kingdom is implementing VAT alongside the other GCC countries but the UAE was the only other member of the bloc to also set a January 1, 2018 deadline. Certain products and services in both countries are exempt but it will apply to many daily items including food, fuel, utility bills and mobile phone subscripitons.

Also read: Saudi tax authority says pre-2018 leases exempt from VAT

Saudi Arabia is expecting to bring in SAR35bn ($9.3bn) in VAT revenues during the tax’s first year.

Read: Saudi expects $9.3bn from VAT in 2018