Saudi Arabia: VAT guidelines for e-commerce

Saudi Arabia: VAT guidelines for e-commerce

The General Authority of Zakat and Tax (GAZT) on 2 March 2021 released guidelines about value added tax (VAT) registration and payment for online and e-commerce transactions and activities.

1000

Related content

The guidelines (available in Arabic) provide that it is mandatory for online enterprises to register for VAT if their annual turnover exceeds SAR 375,000 (approximately U.S. $100,000). VAT registration is optional if yearly sales fall between SAR 187,500 and SAR 375,000.

Online stores are defined as any digital platform that is used for e-commerce activities, and includes activities on Instagram, Whatsapp, Facebook, and LinkedIn, among others.

The guidelines set forth steps on how to:

  • Register for VAT
  • Display the VAT certificate on their platforms
  • File VAT returns and remit VAT

Registration first requires that the online enterprise be registered with the Ministry of Commerce or the Ministry of Investment, and this is followed by registration on the GAZT portal. Approval of registration is to be granted by GAZT within two business days. Once a VAT certificate is acquired, online enterprises must display it on their platforms to avoid penalties up to SAR 50,000. After registration, the enterprise will be required to file the VAT returns by means of the GAZT portal.
 

KPMG observation

It is not clear at this stage which businesses are being targeted—i.e., whether resident and non-resident taxpayers both must comply with the new guidelines.


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

Lachlan Wolfers | +852 2685 7791| lachlan.wolfers@kpmg.com

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal