There are several important details which you must know pertaining to VAT payments in Saudi Arabia. Here’s taking a closer look at some important FAQs that may help you out in this regard.
Major FAQs related to paying VAT in Saudi Arabia
- What is the order for using payment to GAZT for paying off tax liabilities?
Payments made to the General Authority of Zakat & Tax (GAZT) will be applicable for the outstanding balances of an individual in this order:
- Tax liabilities for the total tax period.
- Penalties for this tax period.
- Penalties from earlier tax periods, commencing from the oldest period in consideration.
- What are deadlines for making VAT payments in Saudi Arabia?
People should make VAT payments post submission of VAT returns for a specific tax period. Payment of taxes should be done by the last day of the month post the end of the tax period (maximum deadline). For someone filing his/her monthly returns, the deadline for VAT payments will be the last day of the month after the reporting month in question. For persons filing returns on a quarterly basis, the deadline for VAT payments will be the last day of the month after the reporting quarter.
For instance, someone filing monthly returns for a period between 1st and 31st of June, 2019, will have to pay VAT by the 31st of July, 2019. In a similar manner, someone filing quarterly returns for the tax period between 1st of June and 31st of August, 2019, will have to pay VAT by 30th September, 2019.
Some other FAQs on paying VAT in Saudi Arabia
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In the meantime, here are some other FAQs that you can check out:
- What is the penalty for not paying VAT in Saudi Arabia?
The penalty for non-payment of VAT in Saudi Arabia is 5% of the unpaid tax value for every month of non-payment.
- What will happen in case a VAT payment is missed by the taxpayer in Saudi Arabia?
Whenever the date for paying VAT is missed out by the taxpayer, there will be a notification dispatched on the very first day after the last date for payment. This will inform the person about the penalties that are payable. In case VAT payments are not done swiftly, a formal notice for non-payment will be dispatched accordingly followed by reminders on a regular basis.
After some more time, if there are no responses, there may be a new collection case opened for collection of VAT dues via other methods. These may include legal processes or even commercial sanctions.
- What about a scenario where the VAT payable is lesser than the VAT credit in Saudi Arabia?
For any particular tax period, in case the input tax credit for a taxpayer surpasses the VAT that is payable, then he/she can carry the credit forward to the subsequent period. He/she can also request a refund in this case.
Which businesses have to pay VAT in Saudi Arabia?
These are the businesses which have to pay VAT in Saudi Arabia:
- Companies which have annual taxable supplies of goods/services exceeding SAR 375,000 have to register with the GAZT for VAT.
- Companies with annual taxable supplies below SAR 375,000 but more than SAR 187,500 are to register on a voluntary basis since it offers benefits such as deductions for input taxes.
Companies with revenues lower than SAR 187,500 are exempted from VAT registration in Saudi Arabia. Companies that provide services/goods which are not taxable under VAT, do not have to register for the same as well.