More than 80,000 organisations have officially registered in Saudi Arabia to start paying value-added tax (VAT) when it is introduced next year, the kingdom’s General Authority of Zakat and Tax (GAZT) said in a press release on Monday.

“The number of registered establishments until now have exceeded 80,000,” GAZT said in an Arabic press release sent to the media by email.

The authority also urged all businesses involved in economic activities in the kingdom with revenues exceeding one million Saudi riyals ($266.7 million) to register before December 20

It restated that there will be a one year extension for businesses with yearly revenues of between 375,000 Saudi riyals ($99,986) and one million riyals, while those with yearly revenues in the 187,500-375,000 Saudi riyals bracket are eligible to register voluntary if they wish to claim back VAT on costs incurred. Meanwhile, businesses with yearly revenues of less than 187,500 Saudi riyals are exempt from VAT.

GAZT said businesses that do not register by the deadline will be fined 10,000 Saudi riyals, in addition to other penalties outlined in the VAT Implementing Regulations.

All six of the Gulf Cooperation Council (GCC) countries agreed last year to introduce VAT at a standard rate of five percent on an array of goods and services, in order to diversify their revenues after the sharp drop in oil prices in 2014. However, so far only Saudi Arabia and the United Arab Emirates have confirmed they will apply VAT from January 1, 2018.

(Writing by Michael Fahy, Reem Wafai and Yasmine Saleh; Editing by Shane McGinley)
(micheal.fahy@thomsonreuters.com)



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