General Guideline

Value-Added Tax (VAT) The established entities in the Zone having VAT taxable supplies whether at the basic rate or zero-rated ones, registered for purposes of VAT inside the Kingdom due to such supplies of goods shall be entitled to submit a request to the Authority to refund the VAT resulted from deduction of the input tax incurred by given entities only in the scope of their restricted activities on taxable supplies. Consequently, a credit balance achieved in a case the deductible input tax exceeds the output tax may be refunded. Those refund requests shall be submitted whether in conjunction with the tax returns filed to ZATCA in a regular basis or separately by filing independent refund request to ZATCA in connection with the refunded amounts of VAT(22). Please refer to Section (6.2) herein in these guideline to view the details about the “Deduction of Value-Added Tax (VAT)”. In the event that an entity registered for VAT purposes in the mainland imports goods or merchandise from an established entity in the Zone in accordance with the provisions of the tax and customs regulations, the VAT shall apply to imported goods once their exit from the Zone and upon the expiration of the suspension period for customs duties, restrictions and taxes in accordance with the regular usual measures of importation to the Kingdom and the mainland. Given that such entity shall have the right to deduct the input taxes incurred from the importation in the relevant Tax Return at the date of import according to the usual provisions stipulated in those cases. If the provisions of Article No. (44) of the VAT Implementing Regulations apply to imports made by given entity, it shall be obliged to mention the tax payable on imports in the relevant tax return dated at the time of import and deductions applicable as well in accordance with the procedures set out under the provisions of previously mentioned Article No. (44). (22) Article 69 of the Implementing Regulations of the VAT Law. It is worth to note that in case of returning the imported goods from mainland to the Zone once again- given that the latter is done by any establishment licensed inside the mainland-, then such goods shall be placed free of taxes (under suspension status), thus it shall not be subject to tax. In case that the established entity, which re-export given goods, registered for purposes of VAT, such entity shall be entitled to refund the VAT and customs duties related to the importation activities in accordance with what has been stipulated herein above based on the provisions which state that the re-exportation of goods shall be subject to zero-rate tax. The refund request shall be submitted through the Authority’s website, through tax returns filed to ZATCA in a regular basis or through the form specified for this purpose by the Authority as previously mentioned above, where the Authority will review the refund requests and pay the refund amounts for approved requests directly to the taxpayer’s account (IBAN) according to the terms and conditions specified for this purpose, and the Authority may offset excess Tax held in the Taxable Person’s account against taxes, penalties or any other amounts due to the Authority. In some particular cases, the Authority may allow persons not registered for VAT purposes who engage in specific activities to apply for a refund request in regard of paid taxes for supplies of goods and services received in the Kingdom, whereas the Board of ZATCA shall issue a list including the names of persons eligible for tax refund in accordance with Article seventy (70) of VAT Implementing Regulation.