Compliance Alert - Amendments to the VAT executive regulations

Update: Compliance Alert - Amendments to the VAT executive regulations
Date: 2021-11-18

ZATCA has approved the draft of the proposed amendments to some articles of the VAT implementation regulations, which was posted earlier on the Istitlaa platform for public consultation until 23 October 2021.

The amendments were made effective by Cabinet Resolution No. (570), published in the Official Gazette (Umm Al Qura), and shall be enforced starting from 4 December 2021.

The overall aim of the amendments is to harmonize the VAT executive regulations with the provisions and requirements of the e-invoicing regulations. Some of the key highlights of the amendments include:

  • A Standard tax invoice must be issued when invoicing a taxable person, a legal person not subject to tax, sole proprietor or any other entity established in KSA. Private individuals must be issued a simplified tax invoice;
  • Issue time for the simplified tax invoice is either the supply date or receipt of payment (in whole or partially), whichever is sooner. There is an exception to this requirement in the case of simplified invoices issued in the financial services companies (banks, insurance, etc.) licensed by the concerned authorities in KSA. The exception also applies to other supplies that may be exempt by the Governor of ZATCA - these will follow the standard invoice issue time (no later than 15 days of the month following the month in which the supply was made);
  • ZATCA Governor has the right to change the invoice content requirements or introduce additional requirements to comply with the e-invoicing requirements;
  • ZATCA will have the power to suspend or cancel the obligation to apply the provisions of the e-invoicing regulations wholly or partially for a specific category of taxpayers after studying the reasons for such suspension or cancellation;
  • The law now states clearly that local archiving in KSA is mandatory and that keeping records are also subject to Saudi Arabia cyber security legislation rather than solely to VAT legislation.

The full and final version of the amendments is available only in Arabic and can be accessed here.

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