VAT Grouping Guideline

Contents

1. Introduction

1. 1.1. Implementing the Value Added Tax (VAT) Law in the Kingdom of Saudi Arabia (KSA)

   1. 1.1.1. Zakat, Tax and Customs Authority (ZATCA)

   2. 1.1.2. What is VAT?

2. 1.2. This Guideline

2. Definitions of Key Terms

3. Economic Activity and VAT Registration

1. 3.1. Who Carries out an Economic Activity?

2. 3.2. Mandatory Registration

3. 3.3. Optional Registration

4. Joining a Tax Group

1. 4.1. Persons Eligible to join a Tax Group

   1. 4.1.1. Legal Person carrying on Economic activity in KSA

   2. 4.1.2. Common ownership or control

   3. 4.1.3. Atleast one member of the Tax Group is a Taxable Person

2. 4.2. Responsibilities of the Representative Member

3. 4.3. Application to Form a Tax Group

   1. 4.3.1. Review of the application

   2. 4.3.2. The Effective Date of the Tax Group registration

5. Amending a Tax Group

1. 5.1. Compulsory Changes

2. 5.2. Other Changes

3. 5.3. Effect of Removing Members or Disbanding the Tax Group

6. Implications of Tax Group Treatment

1. 6.1. The Tax Group as Whole Is Regarded as a Single Taxable Person

2. 6.2. Disregard of Supplying Goods and Services Between Group Members

3. 6.3. Joint Liability of Group Members

7. Tax Grouping in Special Cases

1. 7.1. Powers of ZATCA to Set Aside Tax Grouping

2. 7.2. Power of ZATCA to request for two persons to join Tax Grouping

8. Input VAT Deduction

1. 8.1. General Provisions

2. 8.2. Proportional Deduction: Attribution of Input VAT

9. Obligations of the Taxable Person

1. 9.1. Tax Identification Number

2. 9.2. Issuing Invoices

3. 9.3. Filing VAT Returns

4. 9.4. Keeping Records

5. 9.5. VAT Registration Certificate

6. 9.6. Requesting an Explanatory Ruling

7. 9.7. Correcting Past Errors

10. Penalties

11. Contacting Us

Appendix: Frequently Asked Questions