The General Authority of Zakat and Tax (GAZT) in Saudi Arabia has clarified that there will be no VAT on Arabian exports are zero-rated under the VAT Law and Implementing Regulations. This means that in-Kingdom enterprises exporting goods and services can deduct the VAT-eligible input taxes they paid, as long as they file their tax returns as required.
In order to apply the zero rating, the supplier of goods and services must have evidence that they have been transported from the Gulf Cooperation Council region. This will be valid within 90 days after supply. It is mentioned in Article 32 of the regulations. GAZT will reject the documents if it finds that the evidence are not sufficient enough. GAZT stressed that the provision of zero-rating exports is one of many incentives given under the VAT to enterprises exporting goods and services.All exporting enterprises must retain the relevant documents, including those issued by Saudi Customs, which prove that the supplies have been formally cleared for export on behalf of the supplier or customer for each supply, commercial documents with the customer’s details and place of delivery, as well as transport documents for the delivery or receipt of the supplies outside the GCC region.
It is said that all intra-GCC supplies will be zero-rated as an interim measure until VAT is officially implemented in the remaining member nations and electronic VAT system is established across the GCC. GAZT also reminded all VAT registered enterprises with annual supplies exceeding SR40 million ($10.7 million) to file monthly tax returns, as stipulated by the VAT Law and Implementing Regulations.