Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) has released proposed amendments to the VAT Implementing Regulations for public consultation via the Istitlaa platform. These amendments, published on 28 August 2024, target over 25 articles within the VAT regulations and aim to improve compliance and provide further clarity for taxpayers.
VAT Group Provisions: Each entity within a VAT group must now conduct a taxable economic activity and be eligible for VAT registration on a standalone basis, tightening the current criteria.
Services Clarifications: A detailed, though non-exhaustive, list of services has been added, including rights transfers, granting facilities, and intangible rights.
Transfer of Going Concern (TOGC): Both parties must now notify ZATCA of a TOGC, with the recipient assuming the supplier's past and future VAT obligations.
Nonresident Service Supply: Provisions have been refined, requiring beneficiaries residing in KSA to be "associated" with the contractual client, awaiting further clarification.
Ineligible Expenses: A new category of ineligible expenses for VAT recovery, "attending events," has been added, though further clarification on this is pending.
Refund Process: Refund requests below SAR 5,000 are disallowed, and ZATCA may request additional documentation within 20 working days, with approved refunds issued in 30 days.
Businesses operating in Saudi Arabia should carefully review these proposed amendments to understand their potential impact on compliance, administrative processes, and supply chain management. Public feedback will shape the final regulations, expected to be released soon.
Stay updated to ensure timely adaptation to any regulatory changes.
