Returns & Refunds under VAT in KSA

What are Returns & Refunds under VAT in KSA?

Last Updated on

VAT Returns

This is an important procedure under the VAT system. VAT payment and returns are to be made or filed by taxpayers by the last day of the month following the end of that tax period since tax periods will end on the last day of every month. Therefore, returns for each period will be due on the last day of the following month.

The following tables show due dates of VAT payment and returns are due. There are two categories specified in that.

  1. Businesses with annual taxable sales above SAR 40 million have to file monthly returns as below:
Tax Period

Dates

Payment due
Jan. 1–31Feb. 28
Feb. 1–28March 31
March 1–31April 30
April 1–30May 31
May 1–31June 30
June 1–30July 31
July 1–31Aug. 31
Aug. 1–31Sept. 30
Sept. 1–30Oct. 31
Oct. 1–31Nov. 30
Nov. 1–30Dec. 31
Dec. 1–31Jan. 31
  1. Businesses with annual taxable sales under SAR 40 million have to file quarterly returns as below:
Tax Period datesReturn filing date
Jan. 1–Mar. 31April 30 
April 1–June 30 July 31
July 1–Sept. 30 Oct. 31
Oct. 1–Dec. 31 Jan. 31

VAT return form

VAT return requires taxpayers to provide information about VAT collected on sales and paid on purchases. It is split into two sections:

First section of the VAT return form deals with output VAT (VAT on sales) and the second section deals with input VAT (VAT on purchases). Each section consists of three columns namely amount (taxable value), adjustment and VAT amount that appear on the VAT return form.

The greyed out boxes generate data values in the system and are automatically calculated based on your input in the other fields. Let’s see these in detail

S.NoSectionHEADINGAmountAdjustment
1Section 1Standard rated salesAmount of all goods and services sold in the KSA during the current filing periods subject to the standard rate of 5% VATAdjustment refers to the adjustments in the sales amount of goods and services sold in the KSA subject to 5% as reported in previous VAT return forms 
2Section 1Sales to VAT implementing GCC countriesAmount of goods and services sold to customers registered under VAT in other GCC countries during the current filing period subject to 0% VAT ratesAdjustment refers to the adjustments made in the sales amount of goods and services sold to customers in other GCC

countries, and reported in previous return forms

3Section 1Zero rated domestic salesAmount of all goods and services sold in the KSA during the current filing period 

subject to 0% VAT

Adjustment refers to the adjustments in the sales amount of goods and services sold in the KSA, subject to 0%

VAT rate, and reported in previous return forms

4Section 1ExportsAmount of goods and services exported to customers outside the GCC countries

during the current filing period subject to 0% VAT

Adjustment refers to the adjustments made in export amounts of goods and services sold to non-GCC countries, and

reported in previous return forms

5Section 1Exempt salesAmount of goods and services that are exempt from VAT supplied to customers either

inside or outside the KSA during the current filing period

Adjustment refers to the adjustments in amounts of exempt goods and services sold inside and outside the

KSA, and reported in previous return forms

6Section 2Standard rated domestic purchasesAmount of goods and services purchased from suppliers in the KSA during the current filing period subject to the standard rate of 5% VATAdjustment refers to the adjustments made in purchase amounts of goods and services from suppliers in the KSA,

subject to the standard rate of 5% VAT, as reported in previous VAT return forms

7Section 2Imports subject to VAT paid at customsAmount of goods and services purchased from suppliers outside the KSA during the current filing period subject to the standard rate of 5% import VAT which has been paid at customs.Adjustment refers to the adjustments to purchase amount of goods and services purchased from suppliers outside the KSA during the current filing period subject to 5% VAT.
8Section 2Imports subject to VAT accounted for through reverse charge mechanismThis is the total amount of imports that are subject to the reverse charge. This is the situation in which the taxable recipient of goods and services accounts for any VAT due as opposed to the non-resident taxable supplierThis refers to the amount adjusted as a result of imports being required to be accounted under

the reverse charge. This is the situation in which the customer acts as if he is both the supplier and the recipient for VAT purposes and self-assesses any VAT due

9Section 2Zero rated purchasesThis is the total amount of goods and services purchased from suppliers in the KSA during the current

filing period subject to 0% VAT

This refers to the adjustments to purchase amounts of goods and services from suppliers in the KSA, subject to 0% VAT rate, and reported in previous return forms
10Section 2Exempt purchasesThis is the total amount of exempt goods and services purchased from suppliers in the KSA during

the current filing period

This refers to the adjustments to purchase amounts of exempt goods and services from suppliers in the

KSA, and reported in previous return forms.

11Section 2Corrections from previous period (between SAR ±5,000)This is the amount pertaining to a correction of an error reported in previous return forms (up

to 5 years back) more than SAR -5,000 and less than SAR 5,000

N/A
12Section 2VAT credit carried forward from previous period(s)This is the credit in VAT amounts from previous filling periods that were not claimed or refunded which will be deducted from the total VAT due for the current filing periodN/A
13Section 2Net VAT due (or reclaimed)This is the total amount of VAT due or claimed for the current period. Any negative amount is

VAT claimed that could either be refunded or carried forward for subsequent periods

N/A

Payment to GAZT

Registered Businesses must pay the tax owed to GAZT through a bank transfer to GAZT’s designated account using the SADAD payment system.

Extensions for VAT payment

If a taxpayer finds him in a situation unable to pay VAT before the due date, he can request for an extension from GAZT in writing, detailing on the amount of tax owed, the tax periods associated with that sum and the reason for not paying within the specified timeline. The authority will reply either approving or rejecting the request within 20 days.

Tax return corrections

If there is an error made in an already submitted tax return, a taxpayer can notify the same to GAZT within 20 days of the error by submitting a correction form. If there is any discrepancy of tax owed under SAR 5,000 due to the error made, the correction has to be made by adjusting the net tax in the business’s next tax return.

VAT refunds

Eligibility

There are three scenarios where taxpayers are eligible for VAT refunds:

  1. Net tax owed is negative: Where the total amount VAT owed by a business is negative, reason being their input VAT exceeds their output VAT in a given tax period, the business is due to get a refund.
  2. Where previous payment exceeds VAT owed: Where a business has paid more than it owed to GAZT, it can claim a refund.
  3. Credit balance in VAT account: Where a business ends up with a positive balance in their VAT account, they can claim that amount as a refund.

In all the above cases, the standard practice by GAZT is to carry forward the amount in the VAT account unless the taxable person requests refund.

Direct refunds and tax credits

Taxpayers in KSA can request to receive any refund associated with the return that is being filed as a tax credit and claim credit on it. In such cases, the authority will automatically apply the refundable amount to the taxpayer’s balance on their next VAT return or in the following periods.

Adjusting VAT in the event of a change in supply value

In case the value of a supply changes, adjustments will have to be made by the taxpayer to any previously issued VAT invoice. Accordingly, taxpayers use credit and debit notes to make corrections to overstated or understated VAT declared in their previous invoices and adjust it at the time of filing returns.

For more information on this topic, please visit our Insights Section or Contact Us

Share

Address

Binary Tower, Marasi Drive,
Business Bay,
Dubai, UAE
Phone KSA: +966 58 264 5319
UAE: +971 567952590
Mail:info@aviaanaccounting.com

Skip to toolbar