Zakat, Tax and Customs board of directors has issued their approval of adjusting article (20) of the executive regulations of VAT concerning tax supply and due date in specific cases. The adjustments on the regulation included tax supply and due date on all supplied goods or services done by Taxable Persons contracting with government entities under the government competitiveness and procurement law. The tax will be due in the date of issuing the payment order for the supply subject to tax according to the competitiveness law or the date of full or partial receipt of the consideration and to the extent of the received amount, whichever comes first. The main aim of the decision is to make sure that the taxable persons contracting with government entities receive the tax concerning the supply before declaring and paying it to the Authority according to Authority’s regular declarations filling process.
His excellency, Mohammed Al-Jadaan, Minister of Finance and Chairman of the Board of the Zakat, Tax and Customs Authority, has emphasized that this resolution comes under the government’s care to provide more opportunities for the private sector to expand, grow, and operate as well as to facilitate the business world and remove any obstacles and provide a stable environment that encourages economic growth in the medium and long term and maintain the best solvency in the sector.
H.E. has added: “The resolution emphasizes the government’s continuation of working to reinforce the private sector role, to be the main engine of economic growth in addition to supporting small and medium establishments through several initiatives and programs that contribute in raising the private sector participation in the economic growth of the Kingdom.”.
Zakat, Tax and Customs Authority has clarified that said adjustments will be enforced next November 1st, emphasizing that it comes under the Authority’s dedication to ensure such establishments’ compliance with laws related to VAT and ensuring the continuation of the activities from taxpayers contracting with the government entities.
The Authority has clarified that it will begin holding several awareness-raising workshops upon this adjustment starting next Sunday, October 10, with participants from government entities, the business sector, and the Federation of Saudi Chambers to clarify all details about said adjustments and objectives behind them.
The authority invites all those interested from taxpayers and government entities to benefit from the workshops that the Authority will hold ‘virtually’ to raise awareness of this adjustment which will be posted through its website zatca.gov.sa and the Authority’s official Twitter account @ZATCA_SA. The Authority invited all those interested to learn more about this adjustment to directly contact the Authority through the unified number (19993) that works 24 hours a week, e-mail (email@example.com), Ask Zakat and Tax account on Twitter (@zatca_Care), or through instant chats via the website (zatca.gov.sa).
It is worth mentioning that the establishments contracting with government entities were declaring tax due according to the supply dates for submitted claims to government entities within the VAT declaration for the tax period on which any of the following events happened first: the date of the actual supply to the government entity, the date of issuing an invoice or a claim with regards to the supply to that entitiy, or the date of receiving the supply cosnideration or part of it and to the extent of the received amount from that entitiy, whichever comes first. According to the amendment that the Authority announced today, the supply as per contracts made between establishments and government entities in accordance with the competitiveness and procurement law is legit. The tax declaration shall be made under it within the tax declaration period during which the payment order is issued, or the consideration or part of it is received and to the extent of the received amount, whichever comes first, make sure that the taxable persons contracting with government entities receives the tax due for their supplies before it is declared and paid to the Authority.