The Zakat and Tax Authority has confirmed that all businesses that are eligible to pay the Value Added Tax (VAT) must submit their tax returns on time in accordance with the Organization's tax regulations, which are subject to the value of sales of the annual goods and services provided by these establishments.
In a workshop that organized by Asharqia Chamber on Sunday 4/2/2018, Zakat and Tax's officials declared that the establishments whose sales value exceeds 40 million riyals a year, the regulation provides that their tax returns are submitted monthly. On the other hand, the establishments whose sales value are less than that, they must submit their tax declaration quarterly (Every three months).
In addition, the officials stressed the need to pay the due value no later than the last day of each month, in order to avoid any delay penalties that equals 5% of the value of the unpaid tax.
The Director of the General Authority for Zakat and Tax in the Eastern Provine, Saleh Al-Hammad, said that this workshop is part of the efforts of the Authority to communicate with the taxpayers, to answer all their questions and queries after one month of applying the VAT decision, and to explain the taxation mechanisms for all companies.
Abdullah al-Enezi, who works in the General Authority for Zakat and Tax, said that every qualified person engaged in economic activity should submit a tax return and be obliged to pay according to the tax code. After that, A bill of payment containing the invoice number and the amount of the strike would be given to the companies, so that they could make the payment through the electronic payment portal via the Internet, or via ATMs. After completing this process, the companies will receive a notification from Zakat and Tax Authority of the amount that paid. He pointed out that VAT is an indirect tax based on each process and is collected at each stage of the value chain where companies actually act as agents to collect the strike, while at the end the consumer bears the tax burden.
The adviser of the General Authority for Zakat and Tax, Ahmed Hassanein, emphasized the need for tax return, which comes in accordance with two mechanisms, where it is submitted to the Authority monthly or quarterly. He also explained that most sales are taxable except for some exceptions such as residential rent, basic financial services, life insurance, and health and education services.
He referred to a number of common examples and stressed that the service and goods are taxable if they are performed within the Kingdom. The services provided by some establishments outside the Kingdom are activities that have nothing to do with the Tax Authority.
He urged the companies to commit in keeping records for the full data of the tax declaration. He also stressed the need to provide payment and approval at a close time to avoid any delay penalty.
Moreover, he discussed that the machinery and equipment that are exported to countries outside the Kingdom for the purpose of repair in details. He said if the equipment is exported only for the sake of reforming/fixing, then it is not taxable. However, if other than this, then it has achieved additional capacities for the product so it shall be taxable goods.
In regard of the transformation of companies from quarterly to monthly approval or vice versa, he explained that the process is linked to obtaining approval from the Tax Authority after the request in this regard, which is after a year of activity.
