During a workshop held in Asharqia Chamber, Zakat and Tax stated that tax return and payment in a timely manner help enterprises to avoid fines.
The General Authority for Zakat and Tax has invited all entities eligible to pay the value added tax to be obliged to register the full data of the tax declaration. Through providing such declaration at a time when the tax is paid would help in avoiding any delay penalty.
During a workshop that was organized by Asharqia Chamber's Branch in Jubail on Monday morning (19/3/2018), Saadoun bin Khaled Al Khalidi (a member of the Board of Directors of Asharqia Chamber) stated that the national economy is moving towards its desired goals by diversifying its production bases and optimizing its natural and human resources. This is a part of the comprehensive economic reform plan launched though the vision of the Kingdom 2030, which is based on the restructuring of the national economy, both productive and financial, and the exploitation and utilization of all the strengths of the Kingdom.
Value added tax (VAT) is a tax on commodity sales, which is an important source of national income, and can be used to finance services and public initiatives of all kinds. Thus, the VAT is helping the national economy as a catalyst for balanced consumption and contributing to the control of commercial concealment. It is a national project that stimulates the economic cycle, develops government revenues, and harmonizes with international economic performance.
Al-Khalidi added that Asharqia Chamber, which is holding this workshop in cooperation with the General Authority for Zakat and Tax, is aware of the importance of raising the awareness of the business sector about the mechanisms and steps to be followed to provide the value added tax, and the importance of the commitment of its economic entities to provide their tax data in a professional and systematic manner.
During the workshop, officials from the Authority said that the establishments whose sales value exceeds 40 million riyals a year should submit their tax returns on monthly bases according to the tax regulations. While the enterprises whose sale value are less than that must submit their tax returns quarterly (every three months). The Authority officials confirmed that the due value must be paid no later than the last day of the month following the due date of the declaration, in order to avoid any delay penalties which amount to 5% of the value of the unpaid tax.
The director of the Zakat and Tax Authority in the Eastern Region, Saleh Al-Hammad, stated that this workshop is part of the efforts of the Authority to communicate with the taxpayers and answer all their questions and inquiries after the introduction of the value added tax.
Abdullah Al-Anzi (from the General Authority for Zakat and Tax) said that everyone who is qualified and engaged in economic activity should submit a tax declaration and pay 5% of the value added tax imposed on sales of goods and services provided by these establishments. He explained that the payment would be made after the submission of the bill, which contains the invoice number and the amount of the tax due. The payment must then be made through the electronic payment portal via the internet or via the ATM. After completing this process, the taxpayer would receive a notification from the Authority of the amount that was paid. He pointed out that VAT is an indirect tax based on each process and is collected at each stage of the value chain, where companies actually act as agents to collect taxes while the final consumer pays the tax.
Salim Al-Mutairi (from the Value Added Tax Authority) said that the tax return, which comes in accordance with two mechanisms, is to be submitted to the Authority on a monthly or quarterly basis. He elaborated that most sales are taxable except for some exceptions such as: residential rent, basic financial services, life insurance, and health and education services. He referred to a number of common examples and stressed that the service and goods are taxable if they are performed within the Kingdom. The services provided by some establishments outside the Kingdom are activities that have nothing to do with the Authority. He called on companies to commit to recording the full data of the tax declaration. He also stressed the need to be payment and approval at a close time to avoid any delay penalty. With regard to the transformation of companies from the quarterly approval to the monthly, he explained that the process is linked to obtaining the approval of the Authority after the application in this regard, after one year of activity.
At the end of the workshop, AlKhalidi honored the speakers with commemorative shields.
