Today, the implementation of the new mechanism for entitlement to value-added tax for these establishments in Saudi Arabia begins

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The Zakat, Tax and Customs Authority in Saudi Arabia begins today the implementation of the new mechanism for the entitlement of value-added tax for establishments contracting with government agencies, after the authority’s board of directors issued a recent decision approving the amendment of the provisions of Article (twenty) of the VAT executive regulations, which are related to determining the date of supply and tax entitlement. In specific cases.

According to the Saudi newspaper, “Al-Mal”, this amendment to the regulation includes changing the date of supply and the entitlement of value-added tax on all supplies of goods or services made from establishments contracting with government agencies in accordance with contracts concluded with those agencies in accordance with the government competition and procurement system, so that the due date is Tax is the date of issuing the payment order for the claim related to taxable supplies according to the procedures of the competition system or the date of receiving the consideration for the supply or part of it, whichever is earlier, in order to ensure that the entity receives the tax due on the supply before declaring it and paying it to the Authority in its periodic returns.

The authority has held several awareness workshops on this amendment since the first day of the issuance of the amendment decision, in cooperation 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 goals of it, as the authority confirmed that this decision comes within the framework of its keenness to Ensuring the compliance of these establishments with the provisions related to the value-added tax system, in addition to ensuring the continuity of the activity of taxpayers contracting with government agencies.

The Zakat, Tax and Customs Authority had recently launched a simplified guide to amending the tax treatment of supplies made by establishments for a government entity in accordance with the government competition and procurement system, which includes the definition of the decision and the categories subject to it with a simplified explanation of the new mechanism, in addition to the tax declaration form for companies according to the new amendment, As well as fines and scope of application.



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