More specifically, the amendments include:
• Title ‘Date of Supply in specific circumstances’ has now been changed to ‘Date of supply and tax due date’ in specific circumstances.
• Important amendment is the ‘Time of Supply’ (calculation of VAT & Payment) for all goods or services provided to Government agencies, according to the new Government Tenders and Procurement Law.
Currently, businesses offering supplies to Government agencies are required to account for VAT on all invoices raised during the month or quarter, regardless of the actual payment being made by governmental agencies, which was leading to cash flow issues.
Following the approved amendments from 1 November 2021, businesses will be required to account for VAT at the earliest either:
• The date of issuance of payment order; or
• The date of receipt of payment, to the extent of the amount received.
The Board of Directors for Zakat, Tax and Customs Authority (ZATCA) have approved the amendments to Article 20 of the VAT Implementing Regulations for Saudi Arabia, which are effective from 1 November 2021.
For further clarification to the amendments or to discuss your VAT compliance requirements contact Adel Daglas.