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Saudi Arabia: Suggested amendments to the VAT Implementing Regulations

04 October, 2021

In brief

In order to harmonise the provisions and requirements related to the application of the e-invoicing regulation, the Zakat, Tax and Customs Authority (ZATCA) proposed amendments to the VAT Implementing Regulations.  

The draft amendments (available only in Arabic) were published on the Public Consultation Platform of the the National Competitiveness Center on 27 September 2021 - for public consultation.

Interested parties, stakeholders, and taxpayers are highly encouraged to express their opinions - on this platform - and share feedback on the draft amendments no later than 23 October 2021.

In detail

ZATCA proposed amendments to the VAT Implementing Regulations aimed to harmonize the provisions and requirements related to the application of the e-invoicing Regulation. 

The major amendments are summarised as follows:

  1. Proposed amendments to Article 53 - Tax Invoices:

    • Further clarification on the self-billing arrangements 

    • Content of a summary tax invoice

    • Instances and rules related to the issuance of a simplified tax invoice 

    • Granting the power to ZATCA Governor to suspend or cancel the application of e-invoicing regulations to a category of specific taxpayers

  2. Proposed amendments to Article 54 - Credit and Debit Notes:

    • Instances of issuance of Debit and Credit Notes (additional to what has been mentioned in Article 40 of the VAT Implementing Regulations)

    • Content and reference to Debit and Credit Notes

  3. Proposed amendments to Article 66 - Records:

    • Including a non-obstante clause related to the retention of document requirements in KSA

    • Easing record retention for ‘fixed establishments’

    • Further stress on Arabic text to be captured for data retention purposes

    • Mandatory local storage of original documents

    • Further stress on data entry documentation, tamper proofing of systems, etc.

    • Introduction of an automatic tool for ZATCA to review the ERP systems being used by taxpayers

    • Addition of a new clause related to the storing of e-invoices and e-notes as stipulated by e-invoicing regulations

As part of the transitional journey towards e-invoicing implementation in KSA, ZATCA has proposed changes to tax invoices, debit / credit notes and record keeping articles to the VAT Implementing Regulations for public consultation purposes.

PwC Middle East Tax and Legal Services

The Takeaway

Taxable persons are recommended to review the suggested changes and provide their comments/ feedback to ZATCA on the draft amendments no later than 23 October 2021​.

In addition, to the extent it has not been done already, businesses should immediately start assessing the impact of the e-invoicing regulations on their systems and processes and plan the journey towards a successful implementation of e-invoicing (phase 1 - generation) by the set date of 4 December 2021.

Contact us

Mohammed Yaghmour

Middle East Tax & Legal Services Leader, PwC Middle East

Tel: +966 56 704 9675

Yaseen AbuAlkheer

Partner, Zakat and Tax, PwC Middle East

Tel: +966544250540

Chadi Abou Chakra

Partner, Indirect Tax and Fiscal Policy, PwC Middle East

Tel: +966 11 211 0400 Ext: 1858

Fehmi Mounla

Partner, Zakat and Tax, PwC Middle East

Tel: +966 2 610 4400

Fayez Aldebs

Partner, Zakat and Tax, PwC Middle East

Tel: +966 54 400 1037

Suleman Mulla

Partner, International Tax, PwC Middle East

Tel: +966 54 122 8051

Mohammad Hussein Amawi

Partner, Zakat and Tax, PwC Middle East

Tel: +966 55 800 9697

Maher ElAawar

Partner, Middle East Indirect Tax and Fiscal Policy, PwC Middle East

Tel: +971 (0) 56 216 1109

Mohammed Al-Obaidi

Zakat and Tax Leader, PwC Middle East

Tel: +966 50 525 6796

Mohamed Harby

Partner, Zakat and Tax, PwC Middle East

Tel: +966 56 907 2618

Ebrahim Karolia

Partner, International Tax and M&A Services, PwC Saudi Arabia

Tel: +966 11 211 0400 ext. 1771

Wael Osman

Tax & Zakat Partner, PwC Middle East

Tel: +966 13 849 6311

Mugahid Hussein

Partner, Zakat and Tax, PwC Middle East

Tel: +966 54 425 6573

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