GAZT, SOCPA sign agreement to test VAT readiness in large businesses
The General Authority of Zakat and Tax (GAZT) signed an agreement with the Saudi Organization for Certified Public Accountants (SOCPA) to inspect the readiness of a number of large businesses’ accounting systems to apply Value Added Tax (VAT), slated for January 1, 2018.
The agreement comes as a part of the GAZT’s intensive efforts to ensure taxpayers’ readiness for VAT as the highest priority for the GAZT in the upcoming few months.
This includes providing the support needed to facilitate the VAT preparation process. As a result of proper preparation for VAT, businesses will have the benefits of clear organization of financial transactions and adoption of electronic invoicing systems which, in turn, allow taxpayers to easily track their inputs and outputs and get refunds on the input tax.
Explaining the significance of this agreement, His Excellency the Governor of the GAZT Suhail Abanmi said, “Supporting taxpayers to get ready for VAT remains one of our foremost priorities. Signing this agreement with SOCPA serves this objective, and we are relying on SOCPA’s expertise and professionalism to examine major taxpayers’ readiness and understanding of the VAT system and ensuring that they are indeed taking the necessary steps ahead of the VAT implementation on January 1, 2018. It is a high priority for us to ensure that the businesses understand the VAT law and executive regulations and that the necessary steps are taken to apply VAT.”
SOCPA Secretary General Ahmed bin Abdullah Al Moghames said that SOCPA will assign 45 Saudi qualified financial inspectors, including two women, to support the GAZT in checking a number of major taxpayers and ensure their readiness for VAT. “The inspectors selected for this mission are SOCPA-certified inspectors who are experienced in conducting accounting and financial inspections,” he added.
Al Moghames noted that the GAZT will conduct a free training program for the selected inspectors before they start the inspection process to ensure their full understanding of all VAT implementing regulations and aspects, including its theoretical framework and accounting and tax calculations to determine VAT.
“We will make sure that the training covers all aspects of VAT, to ensure the quality of the inspection process,” the SOCPA head said.
He expressed confidence that collaboration with the GAZT will be successful and this will also further enhance the accounting profession in the Kingdom of Saudi Arabia.
Al Moghames stressed the importance of developing strong professional relationship with governmental bodies, allowing exchange of benefits and experience between all parties.
GAZT has invited all eligible businesses whose annual sales exceed SAR 1 million to register for VAT before December 20, 2017, through the VAT website VAT.GOV.SA. Businesses whose annual sales are below SAR 1 million have been given until December 20, 2018, to complete the registration process.
SOCPA has previously concluded a memorandum of understanding with the GAZT to train young accountants in order to start their career as Zakat and tax accountants in the public and private sectors and to collaborate in the areas of training, consultation, research and professional studies related to Zakat and tax accounting.