Saudi Arabia reports 3,500 VAT violations

More than 3,500 value-added tax (VAT) violations have been reported by Saudi Arabia’s General Authority for Zakat and Tax (GAZT), according to reports.

The tax was brought in by Saudi Arabia and the UAE for the first time in January 2018 at a rate of just 5% and has led to much speculation about its possible impact.

The 3,542 violations included failures of eligible entities to register, charging VAT above the rate of 5% and not including the required VAT information.

According to the kingdom’s VAT laws, any business failing to register for VAT will be fined 10,000 riyals ($2,700) while VAT evasion will result in a fine of at least the amount due plus up to three times the value of the goods and services involved.

Although all six GCC states signed an agreement to implement VAT in 2016, Saudi Arabia and the UAE are the only ones to have done so as yet.

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