Al-Jadaan: changes to value added tax in Saudi Arabia support the private sector

Mohammed Al-Jadaan, Saudi finance minister and chairman of the board of directors of Zakat, the tax and customs authority, described the decision to change the expiration date of the value added tax, which will enter in force early next month, as part of the government’s interest in providing more opportunities for the private sector to expand, grow and operate, as well as ease the business climate and remove obstacles, while maintaining a stable environment that stimulates economic growth in the medium and long term and providing better financial solvency for the sector.

Al-Jadaan stressed that the decision confirms the government’s continuation to work to strengthen the role of the private sector. Being the main driver of economic growth, as well as supporting small businesses The Ministry of Zakat, Taxes and Customs explained that this amendment will start from the first of next November of questyear, underlining that this falls within the framework of its desire to guarantee the commitment of these establishments to the provisions relating to the value added tax system, as well as guaranteeing the continuity of the activity of contracting taxpayers with public bodies.

The Board of Directors of Zakat, Revenue and Customs Agency has approved the modification of the provisions of article (twenty) of the executive regulation of value added tax, relating to the determination of the date of the transfer and the tax due in specific cases.

The amendment, which was made to the regulation, included the modification of the date of supply and the right to value added tax on all supplies of goods or services made by entities that contract with government agencies, in on the basis of contracts concluded with these agencies, in compliance with the competition and public procurement system, in so that the date in to which the tax is due is the date of issue of the order for payment for the complaint relating to taxable supplies, according to the procedures of the competition system, or the date of receipt of the consideration for the sale or part of it, whichever is earlier, in order to ensure that the entity receives the tax due on the transfer before declaring it and paying it to the Authority in its periodic returns.

The Zakat Tax and Customs Authority explained that this amendment will start from November 1st questyear, underlining that this is part of its will to ensure that these establishments comply with the relevant provisions of the value added tax system, as well as to ensure the continuity of the business of contracting taxpayers with public bodies.

The authority also indicated that it will start holding several awareness-raising seminars with this amendment starting next Sunday 10 October with government agencies, the business sector and the Federation of Saudi Chambers, in order to clarify all the details related to the amendment and the desired objectives of it.

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