When is VAT due in KSA

Individuals and businesses registered for VAT must remit their tax payment for a given tax period by the end of the month following that period. For clarity, consider the following examples:

• If the business submits monthly VAT returns it needs to pay the VAT for June by 31st July.
• Conversely, if a business that files quarterly returns must settle the VAT for the period from July to September by October 31st

It is important for businesses to remember that VAT payments are due by the specified deadline, regardless of whether the due date falls on a weekday or a weekend.

How is VAT to be Paid in KSA

Taxpayers in Saudi Arabia must transfer their VAT payments to the designated General Authority of Zakat and Tax. Bank account using the SADAD payment system. SADAD offers a convenient and secure way to handle payments online. Anyone with an account at a Saudi bank can set up a SADAD account through their bank's online platform.

To simplify this process, businesses can use an accounting module that integrates with SADAD and the ZATCA portal. This helps in automating VAT calculations and generating payment invoices seamlessly.

Additionally, VAT payments in Saudi Arabia are required to be completed online via the ZATCA (Zakat, Tax, and Customs Authority) portal. After submitting each VAT return, the portal will generate a SADAD invoice, which includes the invoice number and the amount of VAT due.

Penalties for VAT Payment

If a business misses the VAT payment deadline, it will face a 5% penalty on the unpaid amount each month.

Request For extension for VAT Payment

Businesses can ask the General Authority of Zakat and Tax (GAZT) for more time if they cannot pay on time or need to pay in parts. To request an extension, provide:

• The total VAT amount due
• The tax periods for which VAT is owed
• The reason for needing more time

GAZT will review business requests in 20 days. If approved, they will assign a new payment schedule. If denied, business must pay immediately. Even with extension, the business will incur penalties for missing the original deadlines.

Conclusion

In Saudi Arabia, timely VAT payment is crucial to avoid penalties and ensure smooth business operations. Understand your payment deadlines, use the SADAD system and ZATCA portal for payments, and request an extension if needed—but remember, penalties for overdue payments still apply.