Riyadh – Mubasher: Saudi Arabia’s KPMG Al Fozan & Partners has estimated that reducing the registration value threshold for the value-added tax (VAT) to SAR 375,000 will raise the taxpayer by 150,000, according to a new report.
Non-Saudi taxpayers are required to assume joint liability for VAT debts and hire a tax representative to act on their behalf, a requirement that seems to be challenging to some non-resident taxpayers, KPMG said, noting that Saudi taxpayers ought to be prepared as Saudi “tax authorities are not standing still.”
“The relative efficiency with which the General Authority for Zakat and Tax (GAZT) managed the implementation played a significant part in the fairly uneventful adoption," head of VAT at KPMG Al Fozan & Partners Nick Soverall stated.
Saudi Arabia, which started imposing the VAT on 1 January 2018, currently boasts over 140,000 registered taxpayers.
The top official advised businesses to consider creating a tax strategy, one that includes policies and procedures so as to manage tax risk and interaction with stakeholders.
He also called for the use of “tax technology” to aid compliance and analysis, the Saudi provider of tax, audit, and advisory services, added in its report.
“The global trend is towards tax authorities accessing taxpayer data directly and, in some territories, preparing the return for the taxpayer,” it explained.
Soverall further noted that managing large volumes of data often presented a financial and tax risk, which is why integrating tax-specific technology to optimise tax operations would be “critical."
“Our experience in assisting clients with VAT implementation and providing post-implementation support has revealed key insights that point towards a rapid evolution of the management of taxes in the region,” the official further noted.
KPMG Al Fozan & Partners’ VAT head forecast that there would be a rise in the level of scrutiny in the coming period as GAZT continues to “to build its resources to challenge the VAT treatment of specific transactions.”
