KSA
VAT Guide for Governmental bodies
On 12 August ZATCA published its VAT guide which elaborates on the following:
- Definitions of economic activity and Governmental agencies;
- Supplies between Governmental agencies;
- Input VAT deduction and the CRM;
- Contracts between Governmental agencies and private companies;
- Tax compliance obligations.
There are also some noteworthy statements in this Guide:
- Saudi does not operate a de minimis rule for Governmental entities. When these conduct ancillary taxable activities, they are required to register for VAT purposes in KSA;
- It is possible that many Government entities will be partial taxpayers;
- Services provided between government entities are outside of the scope, but the same services provided to the private service are taxable.
Oman
Non-resident taxable person registration
Oman implemented VAT since 16 April 2021 and the first quarterly VAT returns were filed end of July 2021.
Asper VAT legislation of Oman, non-residents are required to register for VAT purposes in Oman if they make supplies which take place in Oman and which are not subject to the reverse charge mechanism. Oman's Tax Authority has clarified that it is required non-residents wishing to directly register for VAT to have a local bank account , and a bank guarantee but that the responsible person can be established outside.
Other GCC countries
Kuwait and Qatar to introduce VAT
As per latest World Bank Group, Kuwait is expected to introduce VAT by the end of this year, while Qatar is expected to follow in 2022.
The WBG estimates that VAT will roughly amount to 2.1% of GDP if introduced and will contribute to reducing the high fiscal deficit.
On the other hand, Qatar is expected to increase the governmental revenues in 2022-23 with several measures , the most significant being the introduction of VAT. At earlier studies suggest, VAT will almost yield 1.2% of GDP in the state.