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.
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
