GCC Indirect Tax Weekly Digest

KSA developments

GAZT publishes e-invoicing technical specifications and procedural rules

The Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) has published the draft electronic invoicing (e-invoicing) Implementation Resolution in Arabic and English on 18 March 2021. The Resolution will be part of the earlier released E-invoicing Regulations which was issued on 4 December 2020, and describes the functional and technical requirements for the e-invoicing implementation.

As previously announced, there will be two major phases, i.e. the first phase has an effective go-live on 4 December 2021 and second phase will go-live as of 1 June 2022. In respect of the second phase, GAZT has mentioned that a further phased roll-out & implementation will be announced in a separate resolution which may imply that not all businesses may be required to comply by 1 June 2022.

In addition, GAZT announced a public consultation whereby comments can be submitted until 17 April 2021.This will allow taxpayers, e-invoicing service providers, advisors and other interested parties to provide input on the draft resolution, annexes and related technical specifications. 

KSA VAT refund for non-resident businesses

Non-resident businesses who are carrying out economic activities outside of KSA may be eligible for a refund on the VAT they have paid in the Kingdom.

The deadline for submitting a claim for KSA VAT incurred in the calendar year 2020 is 30 June 2021. It should be noted that GAZT is yet to publish the exact formal details of the scheme, however, this should not preclude companies from submitting protective claims in the meantime in the expectation that such a process will be introduced.

Oman developments

The Oman Tax Authority (OTA) has published a document entitle ‘VAT General Information’ which is currently available in Arabic only. The document provides guidance to help businesses and consumers get ready for VAT implementation in Oman next month.

In brief, the document includes:

• An introduction to VAT and Oman position on the Gulf Cooperation Council (GCC) VAT Agreement, local published VAT Law and Executive Regulations (with links to texts) 
• VAT implementation timeline (October 2020 – April 16, 2021)
• Calculation of VAT
• VAT mechanism (chain of supply)
• Important details for consumers including:
  • Supplies subject to 5%
  • Exempted goods and services: financial services, healthcare, education, undeveloped land, residential real estate, local passenger transportation and residential property leases
  • Zero-rated goods and services
  • Consumer rights: verification of VAT verification, valid tax invoices, complaints to the OTA on VAT etc.
• The measures the OTA has against VAT fraud and evasion
• Important details for businesses including:
  • Registration requirements such as how to register and important timelines
  • How to be ensure you are ready: showing VAT registration certificate and issuing tax invoices
  • Penalties for non-compliance
    

This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.