Saudi tax authority warns VAT deadline is tomorrow

Saudi Arabia’s General Authority of Zakat and Tax has warned that tomorrow is the final deadline for companies covered by the first phase of the country’s impending 5 per cent value added tax rate.

Businesses with annual revenues exceeding SAR1m ($266,677) have until Wednesday, December 20, to register through the vat.gov.sa website.

Those that fail to register will be subject to a fine of up to SAR10,000 ($2,666) and face suspension from many government services, including the issuance of residence visas.

The penalty for not paying tax in any given month after the January 1 implementation is equivalent to 5 per cent of the unpaid tax, according to the authority.

In addition, that fail to submit their tax return within a set period will face a penalty of between 5 to 25 per cent of the value of the tax.

After the first VAT phase companies with annual revenues of between SAR375,000 ($100,000) and SAR1m have until December 20, 2018 to register.

Before this date it will still be optional for companies with annual revenues of between SAR187,500 ($50,000) and SAR375,000.

Saudi Arabia is implementing the tax alongside the UAE. 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

Read: Saudi Arabia to exempt medicines and medical equipment from VAT

Read: Saudi to apply 5% tax to fuel

The neighbouring GCC states are expected to implement the same VAT rate by early 2019.

Read: All GCC states still committed to VAT but dates will vary, IMF says