VAT to be introduced in KSA
Feb 13th 2017, 10:35 am
#16
...we killed the flame
Joined: Jan 2017
Location: Dubai
Posts: 1,086
Re: VAT to be introduced in KSA
Not to mention that a January launch will bugger things up for the DSF, which I believe is still a big deal to the local economy...
Feb 13th 2017, 2:52 pm
#18
Bored liberal
Thread Starter
Joined: Feb 2007
Location: Over there ----->
Posts: 13,713
Re: VAT to be introduced in KSA
Anyone know anything more concrete on the VAT and how it will be applied, especially in terms of small businesses?
I'm used to dealing with VAT in the UK which involved submitting accounts and VAT forms with allowances for VAT deductions on costs etc. Balance to be paid with accounts quarterly.
However I am hearing that for any company with a yearly turnover of only US$100,000 per annum they will be charged a flat rate of 5% on turnover.
So immediate questions are:-
Is this 5% to be paid up front (i.e. before you can actually apply the 5% rate on sales) (this in effect be a 5% tax on the company before they apply the VAT on future sales - which sucks).
If the 5% is paid upfront per annum - can deductions on VAT paid be applied?
Will it also therefore be a requirement for yearly accounts (perhaps even audited) to be submitted to a tax authority?
If so then the addition in costs to small businesses is significant with increased direct up front tax cost and also increased accounting costs and time.
I guess no one knows yet, but there needs to be answers, guidelines and clarity on this otherwise SMEs are going to suffer come Jan 2018...
I'm used to dealing with VAT in the UK which involved submitting accounts and VAT forms with allowances for VAT deductions on costs etc. Balance to be paid with accounts quarterly.
However I am hearing that for any company with a yearly turnover of only US$100,000 per annum they will be charged a flat rate of 5% on turnover.
So immediate questions are:-
Is this 5% to be paid up front (i.e. before you can actually apply the 5% rate on sales) (this in effect be a 5% tax on the company before they apply the VAT on future sales - which sucks).
If the 5% is paid upfront per annum - can deductions on VAT paid be applied?
Will it also therefore be a requirement for yearly accounts (perhaps even audited) to be submitted to a tax authority?
If so then the addition in costs to small businesses is significant with increased direct up front tax cost and also increased accounting costs and time.
I guess no one knows yet, but there needs to be answers, guidelines and clarity on this otherwise SMEs are going to suffer come Jan 2018...
The thread was about KSA but has become about the GCC generally.
Mar 11th 2017, 9:35 am
#19
Just Joined
Joined: Mar 2017
Posts: 4
Re: VAT to be introduced in KSA
As world is slowly moving towards other energies Saudi is to introduce new measures to boost his economy
Mar 13th 2017, 6:01 am
#20
BE Forum Addict
Joined: Jan 2008
Location: Riyadh.
Posts: 1,899
Re: VAT to be introduced in KSA
Personally, I think the whole process KSA is implementing is the start of a slippery slope.
Soon, we will see other 'taxes' introduced - expat's will pay a monthly fee for all their dependents in the country. This monthly amount will increase over the future years, making it costly for these expats to have their families here with them. I suggest that many expat's ( eastern ) will send their families home to avoid paying this tax. This means that the local economy will suffer as there is less expat money being spent within local communities and expats will send and even bigger portion of their salaries back home.
In trying to generate more income, I think it will actually have the opposite effect.
Soon, we will see other 'taxes' introduced - expat's will pay a monthly fee for all their dependents in the country. This monthly amount will increase over the future years, making it costly for these expats to have their families here with them. I suggest that many expat's ( eastern ) will send their families home to avoid paying this tax. This means that the local economy will suffer as there is less expat money being spent within local communities and expats will send and even bigger portion of their salaries back home.
In trying to generate more income, I think it will actually have the opposite effect.
Mar 13th 2017, 10:31 am
#21
Hit 16's
Joined: Mar 2010
Location: Of all the gin joints, in all the towns, in all the world, she walks into mine
Posts: 13,112
