As a large business, you have been engaged with a VAT representative from the Zakat, Tax and Customs Authority (ZATCA), to begin your VAT readiness process.
The following eight-step guide details the requirements for VAT readiness. It is recommended that every large business follows the below steps to ensure that VAT is being implemented smoothly.
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Further detailing of the readiness steps
- Organisation and Employees Responsibilities
- Assign responsibilities for VAT-related activities within the organisation
- Clearly define the interface to ZATCA by dedicating a counterpart to engage with ZATCA
- Educate employees about VAT.
- Accounting
- Classify all business transactions, goods and services according to VAT treatment
- Reach out to ZATCA and agree on the treatment of special cases not covered by the implementing regulations, example: the method for apportionment in the case of partial VAT exemptions
- Data Record Management
- Address the ability to generate detailed and complete reporting audit trails that are reconciled to accounting records
- Supplier Management
- Include supplier VAT registration number and certificate in supplier master data
- Include a VAT clause in supplier contracts
- Customer Management and ‘Point of Sale’
- Include a VAT clause in customer contracts
- Include a customer VAT registration number and certificate in customer master data
- Address the ability to calculate and display VAT inclusive prices at ‘Point of Sale’ (if applicable)
- Secure the ability to produce invoices including all legally required VAT fields
- Set in place a process for treatment of customer bad debts
- Filing and Payment
- Establish the ability to produce tax reporting including input tax and output tax
- Compliance and Control
- Set in place a process for management of updates to VAT regulatory changes
- Set in place a process to review new business transactions according to their VAT treatment and make appropriate changes
- Apply business controls to verify proper transactions recording
- Embed VAT compliance in risk management framework
- Include a review of VAT processes in all audit scopes and plans
- Systems and IT
- Update and configure IT applications to enable performance of VAT processes
- Establish VAT-appropriate data architecture and management systems
Example of readiness of Large Businesses:
- How did SABIC get ready for VAT?
You could access the readiness tracker checklist document on the following link .For more information on your VAT readiness process, you can contact a VAT agent on our direct hotline or directly contact your VAT relationship manager if you were assigned one.
For all VAT related queries:
- Please call 19993 (toll free). Open for 24 hours a day, 7 days a week
- Or please email us on: vat@gazt.gov.sa
- Or you can visit the link