ZATCA begins enactment of VAT entitlement mechanism for establishments contracting with govt today

Logo of Zakat, Tax and Customs Authority (ZATCA)

The Zakat, Tax and Customs Authority (ZATCA) begins today, Nov. 1, the enactment of amending the value-added tax (VAT) entitlement provisions for establishments contracting with government agencies.

This comes within the framework of the authority’s keenness to ensure that these establishments comply with the relevant provisions of the VAT law.

In October, the board of ZATCA approved amending Provisions of Article No. 20 of the VAT Executive Regulations on setting the date of supply and tax entitlement in certain cases.

The authority stated that the amendment includes changing the date of supply and VAT entitlement for all supplies of goods or services provided by the establishments contracting with government agencies, in accordance with the new government tenders and procurement law.

Thus, the tax entitlement date will be the date of issuing the payment order for the claim related to taxable supplies, in accordance with the procedures of the tender law or the date of receiving the consideration for the supply or part of it, whichever is earlier. This aims to ensure that the establishment receives the supply tax before declaring it and paying it to the authority in its periodic reports.