With its booming ecommerce industry and the youngest internet-connected population in the world, it’s no surprise that Saudi Arabia is one of the most popular destinations for ecommerce sellers to expand their business. However, due to the need to appoint a fiscal representative many UK sellers find it very difficult to register for VAT in the KSA. Fortunately, we at J&P Accountants have our own representative in Saudi Arabia, and thus you can register for your VAT there with us! Want to know more? Read on.
The Situation Of VAT In Saudi Arabia
The KSA introduced VAT relatively recently in January 2018. The hope was that this form of income would lessen their economy’s dependence on oil and would diversify their streams of revenue. Originally, the rate of VAT was 5%. However, this has risen to 15% in response to the Coronavirus pandemic.
This shouldn’t put you off considering VAT Registration in Saudi Arabia though, as the government have expressed multiple times that the rate of VAT is not fixed. It has been confirmd that the hike will be reviewed once the pandemic is over. Whilst it may not go down to 5% immediately, it will almost certainly fall from 15%.
When You Need To Register For VAT In Saudi Arabia
If you’re a business who is registered in Saudi Arabia, you only need to register for VAT if your taxable sales exceed 375,000 SAR (£72,500). Some businesses opt to do so voluntarily in order to avoid input tax when their sales exceed 187, 000 SAR, but this is not necessary.
However, if you are a business from anywhere else you will need to register for VAT to make any sales in the KSA. This means if you are a UK or EU seller who wishes to expand their business to Saudi Arabia, you will have to register for VAT.
How The VAT Registration Process Works In Saudi Arabia
As stated earlier, usually you must appoint a fiscal representative before applying for VAT registration in Saudi Arabia. Whilst this is notoriously difficult, it is not an issue when you apply through us. At J&P, we already have an appointed representative in the UAE. This means we are able to file your tax returns and correspond with the GAZT (the KSA tax authority) on your behalf, as well as getting you registered.
We will be able to handle the entire registration process for you after we receive the relevant information from you. This includes:
- Physical address of regular abode or place of business
- Existing electronic identification number issued by the GAZT (if any)
- Commercial Registration (CR) number
- Value of annual supplies or annual expenses
Upon receiving acceptance and confirmation of your application, you will be free to expand your business in to Saudi Arabia!
Conclusion
So as you can see, whilst the process of registering for VAT in Saudi Arabia can be difficult, through employing our services the process is made much simpler, and you can expand your business into one of the fast growing ecommerce economies in the world.
Our long history of working with ecommerce sellers, especially those who use Amazon and eBay, means we can guide you through every step of the registration process. Furthermore, your expansion does not only have to be limited to the Middle-East, as we would be more than happy to help you register for UK & EU VAT and file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues. So please do not hesitate to send us an e-mail at enquiries@jpaccountant.com or contact us through social media to receive a quote today.
