On November 5, Amazon announced that the Saudi Arabia station fully open to Chinese sellers to register, as a potential stock of the Middle East market is concerned about, earlier there have been some old sellers in the United Arab Emirates through the internal invitation system in advance stationed in Saudi Arabia, to take a step ahead of the tycoon to earn money. China and Saudi Arabia bilateral trade is frequent, Chinese goods by the tycoon welcome, Saudi Arabia's new website implies huge business opportunities. Today, Green Circle will bring you to know more about Saudi Arabia VAT and help sellers to go to the sea in compliance.
01
Who needs to register for Saudi Value Added Tax (VAT)
According to UAE and Saudi laws, if you are a non-UAE/Saudi resident selling goods to UAE/Saudi customers through Amazon FBA pipeline, you need to register VAT regardless of the turnover.
Saudi Arabia and UAE started to levy VAT since January 1, 2018, which is a mandatory value-added tax (VAT) on overseas companies with no exemption; it requires that registration documents be submitted to the tax office within 30 days if there are local sales. Therefore, "Is it necessary to register for Saudi Arabia/UAE VAT only when the sales exceed a certain amount?" is actually a misunderstanding, and should be distinguished from the requirements of registration conditions for local enterprises.
02
How to register for VAT
VAT registration in Saudi Arabia must be done on the official GAZT system, submitted by the tax representative and the tax representative is jointly and severally liable. This means that if the overseas company does not pay the VAT, the financial representative must pay it.
The materials for registering for Saudi VAT are listed below:
- China Business License
- Legal license or identity card
- Registration Application Form
Foreign non-residents TIN VAT reg form
03
Saudi VAT rate
In an effort to boost the domestic economy in the face of the new crown epidemic crisis and record low oil prices, Saudi Arabia has instituted major fiscal austerity measures, including, as of July 1, an increase in the value-added tax (VAT) rate from 5 percent to 15 percent.
04
How and when to declare VAT in Saudi Arabia
The frequency of Saudi VAT filing is based on annual taxable sales, and tax returns and tax payments are completed by the end of the month following the filing cycle (the last day).
- Below 40MM SAR, Quarterly Reporting (Natural Quarterly Reporting)
- Over 40MM SAR, monthly returns
05
How to pay VAT in Saudi Arabia
In both Saudi Arabia and the UAE, the seller can pay the tax directly to the tax office. The remittance account details for the Saudi tax office are as follows:
Saudi Arabia bank
Bank Name: RIYADBANK ALMURABA
Account Name: PYMT TRANS OUT OF KSA FOR ZAKAT AND INCOME TAX
SWIFT/(BIC): RIBLSARI
IBAN: SA1620000002183203589940
*Consult a Green Circle tax advisor for details on how to pay.
06
Saudi Arabia's VAT penalties
The Middle East tax bureau also imposes heavier penalties for late VAT registration, late filing, and late payment of taxes, so we recommend that sellers make good plans to register as early as possible, cooperate with tax representatives on a daily basis to complete the filing on schedule, and pay taxes a few days earlier to avoid unnecessary penalties for late registration or unsuccessful remittance that results in late payment of taxes.
07
Can I deduct VAT for customs clearance?
Customs clearance in Saudi Arabia, the need for local companies in the Middle East as an importer (IOR), customs clearance with a code called "Customs Registration Code", the application of this code requires two conditions: 1. registered local companies in Saudi Arabia, and 2. to apply for an import license. At present, we get the news from the relevant person in charge of ARAMEX, if the seller does not have IOR in the Middle East, you can use the dxb import company recommended by ARAMEX to do the IOR, and then use the seller's VAT number (vat acct Number) to clear the customs, and the dxb import company will be responsible for the customs declaration of the import. However, it is said that the handling fee of this import declaration will be higher, please consult with Aramax staff for details.
Most of the Middle East logistics companies use the double clearing method of customs clearance, so it is very difficult for non-Saudi companies to get the import tax bill of their own tax code for tax deduction and refund of goods imported. In addition, we learned from the United Middle East Logistics Vnlin: all products imported into Saudi Arabia must be registered on the SABER platform and submitted to the Product Conformity Certificate PCoC (Product CoC) and the Shipment Conformity Certificate SCoC (Shipment CoC) prior to the arrival of the goods in Hong Kong, otherwise there is a possibility that the arrival of goods to Hong Kong will be returned to the shipment of the situation. Specifically, you can consult the Green Circle's dedicated account manager for your connecting resources.
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