Managing VAT (Value Added Tax) accounting is always a big task for all business. Comparing with other countries managing VAT in Saudi Arabia is a bit of a complex task. VAT applied to the business depending upon the amount of sales that happen to your business in the country in B2B or B2C platforms.
Government has introduced VAT regulations in Saudi Arabia to support low and middle-income nationals through the Citizen’s Account Program, which aims to offset the impact of the Kingdom’s austerity measures.
In Saudi Arabia businesses, who do not have a place of residence in the state, will have to compulsorily register under VAT irrespective of the registration threshold, as soon as they make any supply or purchase which they are liable to charge VAT. If in this case a non resident should appoint a Tax representative in Saudi Arabia who is approved by GAZT.
As per the VAT Saudi Arabia if a business possessing a VAT registration lends credibility to their business. Any kind of business in Saudi Arabia small or large business it gives them a credibility and can improve and grow their business and find valuable new customers it also leads to convey customers that the business it trust variety.
Saudi VAT registered businesses making such supplies are eligible for refund of VAT paid on purchases used to make the zero rated supplies. Businesses which make zero rated supplies and goods would be benefitted by obtaining a VAT registration. They can reduce the cost of making supplies with the benefit of enabling the refund of VAT paid on purchases. Also the supplies such as export of goods, export of services, supply of investment metals are notified as zero rated supplies and VAT is applied for these.
Many business facing issues to manage their tax VAT accounting systems promotes better accounting system as record of tax paid purchases required to be maintained and keep them tract all the financial data in regular. Small or large businesses should evaluate the many benefits of obtaining a VAT registration in Saudi Arabia. While obtaining a VAT registration brings with it additional costs of compliance, also helps them to keep accurate records and submit regular returns, the benefits of registration.