Interactive Guidelines for VAT Entitlement New Mechanism, Announced

The Zakat, Tax and Customs Authority launched the interactive guidelines related to amending the tax treatment of supplies made by establishments for a government entity, in accordance with the government competition and procurement system, after the authority’s board of directors issued a decision on October 8, 2021, approving the amendment of the provisions of Article (20) of the executive regulations for tax on the added value, related to determining the date of supply and the tax due, in specific cases.

The guidelines clarify the scope and impact of the tax treatment amendment, with practical and simplified illustrative examples to clarify the difference between the previous and current treatments, as well as the definition of the government agencies intended in the decision, in addition to identifying the supplies included in the amendment (new claims/goods and services of whatever nature).

The interactive guidelines, launched by the authority, also includes the requirements for issuing tax invoices, in accordance with the provisions of the system and regulations, fines imposed, in cases of non-compliance, as well as all frequently asked questions about the decision to amend tax treatment.

The launch of the Zakat, Tax and Customs authority comes as an interactive guide for amending the tax treatment of supplies made for the benefit of a government entity, in accordance with the government competition and procurement system, with the aim to provide taxpayers from the business sector, who have contracts with government agencies and institutions, with furthermore facilitation.