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Saudi Arabia: VAT refund for non-residents requires action by 30 June 2020

Saudi Arabia: VAT refund for non-residents

Non-resident businesses that conduct economic activities outside of the Kingdom of Saudi Arabia may be eligible for a refund of the value added tax (VAT) that they incurred in Saudi Arabia.


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In light of Article 72 of the VAT implementing regulations, these non-residents may be considered to be “eligible persons” if the following conditions are met:

  • They are established in a country with a transaction tax system similar to VAT and are registered for that tax; and
  • A reciprocal arrangement as to the VAT refund exists between Saudi Arabia and that other country.

In addition, foreign governments, international organizations, diplomatic and consular bodies, and missions are also considered to be “eligible persons” and may submit a VAT refund application under the provisions of Article 70 of the regulations.

Deadline for filing refund applications

VAT refund applications must be submitted within six months from the end of the calendar year in which the VAT was incurred. For example, the refund application for the year 2019 is to be prepared and along with relevant supporting documents and submitted to the General Authority of Zakat and Tax (GAZT) before 30 June 2020.

KPMG observation

The administrative process for VAT refunds is still unclear, and the GAZT has yet to publish guidelines on the VAT refund system. Still, eligible businesses need to consider taking steps to preserve their entitlement to a refund of VAT incurred in 2019 by submitting a refund application.

Further, given the recently announced increase in standard rate of VAT from 5% to 15% (effective 1 July 2020), it will be increasingly important for foreign businesses to assess the overall impact of VAT on their operations in Saudi Arabia. In addition to the VAT refund for the calendar year 2019, there may be an opportunity for non-resident businesses to save on increased VAT costs going forward.

For more information, contact the head of KPMG’s Global Indirect Tax Services:

Lachlan Wolfers | +852 2685 7791|

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