Saudi Arabia: E-invoicing phase II “linkage and integration”

Zakat, Tax & Customs Authority (ZATCA) revealed that the implementation of the linking and integration phase for e-invoicing will start on 1 January 2023, with the establishments that were selected within the first group. They emphasise that the establishments included in the same group were identified based on the standard of the volume of revenues subject to VAT for the year 2021, for establishments whose revenues exceed 3 billion riyals (approx. EUR 805,000).

As this stage, additional requirements are as follows:

• Linking the electronic billing systems of taxpayers with the authority's system.
• Issuing electronic invoices based on a specific formula.
• Including a number of additional elements in the invoice.

Zakat, Tax & Customs Authority re-launches tax amnesty initiative

ZATCA announced the re-launch of the initiative to abolish fines and exemption from penalties regarding all tax laws managed by ZATCA, for a period of six months, starting from 1 June 2022 until 30 November 2022, with the aim of mitigating the economic effects of the establishments as a result of the COVID-19 pandemic.

The authority clarified that the fines included in the exemption decision are as follows:

• Penalty for late registration
• Penalty for late payment
• Penalty for late filing of returns in all tax systems
• The fine for correcting the return for VAT
• In addition to fines for field control violations related to the application of electronic billing

The relief is not granted for penalties related to tax evasion and penalties that had been settled before the issuance date.

Zakat, Tax & Customs Authority provides a guide for applying VAT to the contracting sector

The authority has worked to emphasise the importance of the guide in providing more clarifications to the taxpayers and assisting them in understanding the application of VAT in relation to the construction services and the contracting sector in the Kingdom of Saudi Arabia.

The guide illustrates the following points:

• Construction services
• Services related to taxable real estate
• Providing a full explanation about the tax due date for enterprises contracting with government agencies
• The date of issuing the tax invoice

Read the WTS Global VAT Newsletter here.