The document provides an overview of value-added tax (VAT) implementation in Saudi Arabia, including: 1) It outlines the legal framework for VAT including the GCC agreement, VAT law, and implementation regulations. 2) It explains the VAT model through an example showing how VAT is applied at each stage of production and distribution. 3) It provides a high-level roadmap and timeline for VAT implementation in Saudi Arabia, including registration requirements, tax rates, compliance periods, and transition support.

1. APMH & Associates LLP
Chartered Accountants
KSA VAT IN A
SNAPSHOT
For Private Circulation Only

2. APMH & Associates LLP
Chartered Accountants
• Legal Framework
• Understanding VAT Model
• A Quick Guide to VAT Registration
• Rates and Input Credit Mechanism
• What is Supply?
• Intra GCC Transactions
• VAT Periodical Compliance
• Transition for Ongoing Contracts
• VAT Impact Areas
• VAT Implementation Roadmap
• KSA VAT Preparedness
• VAT & GST Implementation Success Story
• VAT Advisory

3. Legal Framework for
VAT in KSA
GCC
AGREEMENT
(finalized and
published)
VAT LAW
(final law
published)
VAT IMPLEMENTATION
REGULATIONS
(final regulations published)
TAX RULINGS
(as and when required)
•
Sets broad principles and some mandatory elements
for VAT in GCC
•
Each state responsible for its own implementation
and enforcement
•
Primary legislation for VAT in KSA which gives effect to GCC agreement
•
Sets out implementation and compliance enforcement framework for VAT
•
Secondary legislations which provide additional rules and laws for interpretation of
GCC Agreement and VAT law
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4. Value Added Tax (VAT) Model
Manufacturer
(SAR 10000 + VAT 500)
Distributor
(SAR 11000 + VAT 550)
Retailer
(SAR 12100 + VAT 605)
Consumer
(Landed Cost SAR 12705)SAR 500
SAR 50(550-500)
SAR 55
(605 – 550)
SAR
(12100+605)
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5. VAT Impact in KSA
Sales Price VAT @ 5% VAT Credit Tax to the
Government
Manufacturer to Net Taxable Price 10000.00 500.00 500.00
Distributor
Distributor to Net Taxable Price 110% 11000.00 550.00 500.00 50.00
Retailer
Retailer to Net Taxable Price 110% 12100.00 605.00 550.00 55.00
Consumer Dealer
Total 1655.00 1050.00 605.00
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6. Registration
Mandatory
Article 3 & 4
Person has residence in
State/ Implementing State
a) Total Value of All supplies
exceed the Mandatory
Threshold (SAR 375000)”
b) Anticipated that above
Threshold will exceed in
next 30 Days
a) SAR 187500
b) Value of Supplies not
exceeded but expenses
incurred exceeded volun-
tary threshold limit
If he makes
A) Supplies of goods or
services and
B) No other person is
obligated to pay the due tax
on these supplies
No threshold limit
Voluntary
Article 7
Person does not
have a place of residence
Threshold limit for mandatory registration as per article 50/51 of GCC Agreement
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7. Rates and Input Credit MechanismAPMH & Associates LLP
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5%
Input Tax
Deductible
• Standard Rate
Out of Scope
(Entities + Type
of Transactions
+ Supplies)
• GOVT Or activities of Government and Public authorities (article 9)
• Employer , Employed or contracted persons where there is relation of
employer & employees with remuneration (article 9)
• Transfer in the same entity or group entity (article 18)
• Issue or Supply of Voucher (article 19)
0%
Input
Tax Deductible
• Exports of Goods from KSA (Article 32)
• Services Provided to Non-GCC Residents (Article 33)
• Transportation services for Goods or passengers outside the
Kingdom and Supplies relating to transportation (Article 34)
• Medicines and medical equipment (Article 35)
Exempt
Non Deductible
• Finance Services including Life Insurance (Article 29)
• Lease or license of Residential Real Estate (Article 30)

8. What is Supply?
Deemed
Supply
SupplySupply of Services
Article 6 of Law
Article 5 of GCC Agreement
Exempt Supply
Supply of Goods
Supply of Goods Means
• Transfer of Ownership
• Transfer of right to use
• Deferred transfer of
ownership
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Supply
(Article14oftheregulation)
Supply of Goods
Reverse Charge Mechanism
Imports in the state
Supply of Services

9. Including Non Implementing
states of GCC region
World
Local Sale
KSA VAT
Local Purchase
Suppliers Suppliers
Import Purchase
KSA VAT payable by Importer
Zero Rated
Export Sale
You
KSA VAT payable by Importer
Intra GCC purchase
Suppliers
Registered Dealer
UAE VAT payable by Importer
Intra GCC sale
KSAVATIntraGCCsale
BranchTransfer
NoTax
KSA VAT
KSA Implementing States
GCC Region
UAE
Unregistered
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Chartered Accountants Intra-GCC Transaction

10. VAT Periodical Compliance
Upto SAR 40MM Above SAR 40MM
Filing frequency : Quarterly
First filing period : Jan-Mar 2018
First filing deadline : 30-April 2018
Filing frequency : Monthly
First filing period : Jan 2018
First filing deadline : 28-Feb 2018
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(Article 58 of Regulation)

11. APMH & Associates LLP
Chartered Accountants
Ongoing Contracts
(Article 79 of the VAT Regulation)
1st
May 2017
31st
May 2017
VAT is applicable from appointed date
1st
Jan 2018 31st
Dec 2018
15th
April 2017 1st
Jan 2018 31st
Dec 2018
VAT is Zero Rated VAT is Applicable
* This “Zero Rating” can only be done if the customer provides a written certificate that
Input Tax is able to be deducted or refunded in full on the supply

12. VAT Impact
Areas
• Assess costing
• Re-design processes
• Collect customer vat data
• Restructure at existing contracts
• complete registration formalities
• Plan for transition to new law
• Plan for the change in cashflow
• Design compliance calendars
• Add relevant tax clauses in relevant agreements
• Validate critical documentation and formats
• Update vat data in vendor/ customer Masters
• Update inventory masters with Tax class and rates
• Develop document formats for Invoices / debit note / credit notes
• Design relevant statutory
• Reports for vat filing and record Keeping
• Re-skill / recruit / outsource
• Assess and change the division of
Responsibility with respect to vat
Supply
Chain
Sales &
Marketing
Human
Capital
IT
Systems
Tax &
Finance
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13. Post Implementation Support
• Day to day queries
• Handholding team through
3 monthly cycles of VAT filing
from an offshore basis
Impact Analysis
• “As is” Study
• Suggesting Tax Optimization
Scenarios
• Drawing Change Management
Roadmap
PHASE-1
Implementation
• Registrations
• Policy and SOPs
• Team Training
• System Integration support
PHASE-2
• Impact in costing / pricing /
cashflow due to VAT
• Objective decision making for
optimizing the tax impact
• Approved implementation
roadmap
• Clear operating guideline
• Team sensitization
• ERP requirement mapping
• ERP User Acceptance
Testing (UAT)
• Compliance Assurance
• Online issue resolution
• System related feedback
generation
PHASE-3
Roadmap for VAT Implementation
ActivityKeyOutcome
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Impact
Analysis
Nov. 2017
* The above activity shall call for 25 to 60 man days which shall be priced at $30000 to $50000 for the project including
trave, stay, visa of the team.
Dec. 2017 1st
Jan. 2018 Feb., Mar., April 2018
Implementation
Post
Implementation
support

14. KSA VAT Preparedness
APMH & Associates LLP
Chartered Accountants
• Have worked with
various Industry tier
• Good presentation skills
• Analytical Skills
• Grip on VAT or Indirect Tax laws
Pricing :
$ 1000 per day per expert
*Stay, food, travel, visa over and above $500 per day of stay
VAT Preparedness Analysis
Team
Understanding
• Understanding of Business
• Understanding of Systems
Training
• On Boarding Workshop
• Workshop on Implementation
• Handling Q & A
Reporting
• Issues & Suggestions
• Preparedness in Domain
• Preparedness in People
• Preparedness in Systems

15. APMH & Associates LLP
Chartered Accountants
• Experts with through Domain
knowledge of VAT
• Detailed templates & process flows,
• Helpdesk support
• Compliance Experience &
Software Tieups
Pricing :
* $ 3000 per month for one VAT Registration / $ 5000 for 2 registrations
* 1 onsite visit to the client place
* Unlimited offsite support by emails and calls
VAT Enterprise Compliance
Generation of relevant VAT
reports from ERP
Upload returns and track
pending status
Sense check the VAT aspects
in transactions
Compute the VAT liability and
generate payments advice
Develop of reports for the
management and accounting
entries
Close accounts in ERP

16. VAT & GST Implementation Success Story
Multi-Nationals Trading and Distribution Manufacturing and Ancillaries
Construction and Real-estateHealthcareLogisticsBanking
Engineering Hospitality Broking e-commerceSAAS
Startups Small and Medium Large
VC / PE Funded
Family Owned
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17. CA Mitesh Katira
Partner APMH
CA Pranav Kapadia
Partner APMH
Profile Brief
Mitesh is a Chartered Accountant and a ISA qualified with specialisation
lies in Business Advisory Services with more than 15 years of experience.
Mitesh has been focusing on Internal Audits, Compliance Outsourcing and
GST implementation. He has been helping corporate and Multinationals on
GST Impact Analysis, Implementation and Compliance. Mitesh has been
convenor for Information Technology Committee of the CTC i.e., Chamber
of Tax Consultants. He is also a part of IT committee of the WIRC of ICAI.
He has been assisting a diverse range of businesses with the
implementation of VAT in the GCC mainly handling VAT implementation
projects in Damman and Kingdom of Saudi Arabia (KSA). He has also
visited UAE, Khobar, Dammam, Jeddah and Riyadh for understanding the
VAT implementation issues of various industries, multinationals, hospitals,
hotels, real-estate companies in this region.
Specializations
• VAT Implementation
• VAT Transaction advisory
• VAT compliance outsourcing
• Corporate Training
• Process Implementation
Education and Certifications
• Chartered Accountant • DISA - ICAI
• FAFP – ICAI • Certified trainer india GST by ICAI
Profile Brief
Pranav’s expertise lies in GST Consulting,GST Advance Ruling,
GST Transaction Advisory and GST Classification Consulting. He has been
an expert consultant to large corporates with presence in Multiple States
with complex structures in the Indirect Tax. Pranav lucidly deals in complex
legal matters like Works Contracts (WCT), DDQ (Determination Disputed
Question) now called Advance Ruling (AR), Assessments and Appeals
related to VAT and Allied Tax Laws. Pranav is also an expert consultant on
VAT for Corporates and Multinationals in GCC region, mainly Saudi Arabia
and UAE. He is the President of The Goods & Service Tax Practitioners
Association (GSTPAM) of Maharashtra.
Pranav is also part of the Indirect Tax Research Committee of the WIRC of
ICAI. He has been past Chairman of Indirect Tax Committee of The Chamber
of Tax Consultants for 2014-15 and past Convenor of Ghatkopar CPE Study
Circle of ICAI. Pranav has addressed various seminars and lectures on
MVAT and CST & GST at the GSTPAM, Chamber of Tax Consultants,
WIRC Study Circles of ICAI and various Industrial Associations in Mumbai
and across Maharashtra.
Specializations
• VAT Advisory
• VAT Opinion
• VAT Advance Ruling
Education
• Chartered Accountant
• DISA - ICAI
APMH & Associates LLP
Chartered Accountants

18. APMH & Associates LLP
Chartered Accountants
CA Atul Mehta
Senior Partner
Profile Brief
Atul focuses on accounting and taxation practice of the firm. He has
exposure of more than 17 years in accounts outsourcing and tax advisory
side with a specialization in GST Compliance His expertise lies in
consultancy, opinions and Tax Planning for Corporates and Individuals.
Atul can lucidly handle complex audits, advisory and assessment matters
issues related Works Contract matters, CENVAT Credit Rules, Point of
Taxation (POT) Rules, Point of Provision of Services (POPS) Rule and so
on. Currently Atul is a Convenor for Indirect Taxation Committee of the
Chamber of Tax Consultants. He has led the Ghatkopar CA CPE Study
Circle of WIRC. Atul has Conducted Training Session organized by
WIRC-ICAI and has served at WIRC ICAI Committee for Research and
Development and Direct Tax Committee. Atul is appointed as the Vice
Chairman of CTC IDT Committe of India.
Specializations
• VAT Compliance
Education
• Chartered Accountant
• DISA - ICAI
CA Amlesh Gupta
Manager
APMH
Profile Brief
CA Amlesh Gupta is a Chartered Accountant by profession with more
than 5 yrs of experience in Tax Advisory services mainly consisting of
GST Implementation and Enterprise Compliance India VAT, Service Tax,
Withholding tax and GST Compliance .Amlesh has been handholding
India GST Impact Analysis and GST Implementation for various service
industries while India went live with GST on 1st July 2017. Apart from
domain knowledge, Amlesh has brief understanding of IT Systems,
Project Management and Training Skills. Amlesh has been
understanding, learning and tracking development in VAT Laws and
Regulations in Saudi Arabia and other GCC Countries. Amlesh has
extensive knowledge and experience in handling VAT implementation in
Dammam, Kingdom of Saudi Arabia (KSA) and is currently handling a
huge project in Dammam.
Specializations
• Tax Advisory
• VAT Compliances & Consulting
• GST Implementation, Compliance and Consulting
• Tax Technology
Education
• B.Com
• Chartered Accountant

19. APMH & Associates LLP
Chartered Accountants
Mehul Pawani
Senior IT Consultant
APMH
Profile Brief
Mehul is an IT enthusiast with deep understanding about functional
aspects of software applications computer systems, networking along
with background of accounting and finance. Mehul has been attending
various workshops and trainings on data analytics, excel, ethical
hacking, cyber forensic, excel and so on. With his ability to
understand IT and money trails ie, accounting quickly.
Mehul is an expert in systems audit, vulnerability testing, application
implementation, etc. Mehul has been important part of IT team of
APMH for more than 3 years.
Mehul has been helping a hospital in Dammam, Saudi Arabia as well as
an Education Group in the UAE to adopt their ERP both billing system
the GL system to the requirements of the VAT.
Specializations
• VAT IT Implementation
• Process Consultant
CA Pratik Mehta
VAT Consultant
Profile Brief
Pratik is a qualified Chartered Accountant from the ICAI. He is been in
the field of Indirect Taxation for more than 5 years. He has worked with
various corporates and multinationals with regards to VAT, Service Tax
and now GST.
Pratik has been doing consulting, training and implementation of
Indirect Tax Laws in varied industries like financial services, trading,
manufacturing, education and so on.
Pratik has been learning and implementation UAE VAT for a large
education group based in Dubai.
Specializations
• Tax Advisory
• VAT Compliances & Consulting
• Tax Technology
Education
• B.Com
• Chartered Accountant

20. Mumbai :
D-613/614, Neelkanth Business Park, Opp. Near Railway Station, Vidyavihar(W), Mumbai - 400 086.
+91-22-2514-6854 / 55 / 56 / 57 / 58
+91-9833777556
info@apmh.in
www.apmh.in
Saudi :
+96-6547300622
mitesh@apmh.in
www.apmh.in
Get in Touch
Date of Designing : 27/10/2017
Disclaimer: Content published in this book is based on the VAT Acts, Rules and notifications from other sources believed to be reliable, but no
representation or warranty is made to its accuracy, completeness or correctness. This is to simplify the legal provisions and procedural aspects
of of the law keeping in mind a basic businessman and their accounting team, with the helps of simpler language and graphical representation
and so may result into error or omission or interpretation differences. This document is not intended to be a substitute for professional, technical
or legal advice or opinion and the contents in this document are subject to change without notice. Whilst due care has been taken in the
preparation of this presentation and information contained herein, APMH accept any liability whatsoever, for any direct or consequential loss
howsoever arising from any use of this document or its contents or otherwise arising in connection herewith.
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