ZATCA Urges Commercial Sector to Submit VAT Statements for June, Q2 of 2024

The Zakat, Tax and Customs Authority (ZATCA) has called on commercial establishments in Saudi Arabia to submit their Value-Added Tax (VAT) statements for June and the second quarter of 2024 by July 31, 2024. The announcement, made on July 21, 2024, in Riyadh, applies to businesses with annual revenues exceeding SAR40 million, which must file monthly VAT returns for June, and those with revenues not exceeding SAR40 million, which must file quarterly returns for Q2 2024. ZATCA emphasized the importance of timely submission to avoid penalties ranging from 5% to 25% of the tax owed.

Context and Background

VAT is an indirect tax levied on most goods and services in Saudi Arabia, with a standard rate of 15% since July 2020. The tax is a key component of the Kingdom’s efforts to diversify revenue sources under Vision 2030. ZATCA, the authority responsible for tax collection and compliance, regularly reminds businesses of their obligations to ensure a smooth and transparent tax system. This latest call aligns with ZATCA’s ongoing digital transformation, offering multiple online channels for filing and payment.

Key Details

Businesses required to submit monthly VAT statements for June are those with annual revenues above SAR40 million. These entities must file by July 31. Similarly, businesses with annual revenues of SAR40 million or less must submit their quarterly VAT statements for Q2 2024 by the same deadline. ZATCA encourages using the ZATCA website or the ZATCA smartphone application for prompt filing and payment. Late submissions will incur a fine of at least 5% and up to 25% of the unpaid tax. For assistance, taxpayers can contact the 24/7 call center at 19993, reach out via X (formerly Twitter) at @Zatca_Care, email [email protected], or use the instant chat on the ZATCA website.

International Impact

Timely VAT compliance is crucial for maintaining Saudi Arabia’s business-friendly environment and attracting foreign investment. It ensures that the Kingdom’s tax system operates efficiently, which is vital for economic stability and growth. As Saudi Arabia continues to open its economy to the world, adherence to tax regulations by commercial establishments demonstrates the private sector’s commitment to contributing to national development.

Vision 2030 Alignment

This initiative supports Vision 2030 by promoting fiscal responsibility and enhancing government revenue streams. ZATCA’s efforts to streamline tax processes through digital platforms reflect the broader goal of modernizing public services and fostering a transparent, efficient economy. Ultimately, such measures contribute to the Kingdom’s sustainable development and its position as a leading global economy.

20 Questions

Q1. What is VAT?

A1. VAT, or Value-Added Tax, is an indirect tax imposed on most goods and services sold in Saudi Arabia. The standard rate is 15%, and it is a key source of government revenue.

Q2. Who needs to submit VAT statements for June?

A2. Commercial establishments with annual revenues exceeding SAR40 million must submit monthly VAT statements for June by July 31, 2024.

Q3. Who needs to submit VAT statements for Q2 2024?

A3. Businesses with annual revenues of SAR40 million or less must file quarterly VAT statements for the second quarter of 2024 by July 31, 2024.

Q4. What is the deadline for submitting VAT statements?

A4. The deadline for both monthly (June) and quarterly (Q2) VAT statements is July 31, 2024.

Q5. What are the penalties for late submission?

A5. Late submission incurs a fine of at least 5% and up to 25% of the tax value owed.

Q6. How can businesses submit their VAT statements?

A6. Businesses can submit via the ZATCA website at zatca.gov.sa or through the ZATCA smartphone application.

Q7. What support channels are available for taxpayers?

A7. Taxpayers can contact the 24/7 call center at 19993, reach out via X at @Zatca_Care, email [email protected], or use instant chat on the ZATCA website.

Q8. Why is VAT important for Saudi Arabia’s economy?

A8. VAT provides a stable revenue stream that supports government spending on infrastructure, public services, and Vision 2030 initiatives.

Q9. What is ZATCA?

A9. ZATCA is the Zakat, Tax and Customs Authority, responsible for administering taxes, zakat, and customs in Saudi Arabia.

Q10. How does VAT compliance benefit businesses?

A10. Compliance avoids penalties and ensures businesses operate smoothly, contributing to a transparent and efficient business environment.

Q11. Can businesses pay VAT through the mobile app?

A11. Yes, payments can be made via the ZATCA smartphone application.

Q12. What is the standard VAT rate in Saudi Arabia?

A12. The standard VAT rate in Saudi Arabia is 15%, effective since July 2020.

Q13. Are there exceptions to VAT?

A13. Yes, some goods and services are exempt or zero-rated, such as certain financial services and exports.

Q14. How does VAT align with Vision 2030?

A14. VAT supports economic diversification and non-oil revenue generation, key goals of Vision 2030.

Q15. What happens if a business fails to submit on time?

A15. Failure to submit by the deadline results in fines as specified by ZATCA, ranging from 5% to 25% of the tax owed.

Q16. Is the call center available 24/7?

A16. Yes, the ZATCA call center at 19993 operates 24 hours a day, seven days a week.

Q17. Can foreign businesses operating in Saudi Arabia submit VAT?

A17. Yes, foreign businesses registered for VAT in Saudi Arabia must comply with the same submission requirements.

Q18. What is the role of VAT in Saudi Arabia’s fiscal policy?

A18. VAT is a key tool for generating non-oil revenue, reducing dependence on oil, and funding public services.

Q19. How often must businesses with revenues above SAR40 million file VAT?

A19. They must file VAT returns monthly.

Q20. How can I get more information about VAT?

A20. You can contact ZATCA via the call center, X, email, or instant chat on their website for detailed information.

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