Inspection tours to detect VAT violations

The Ministry of Commerce and Investment (MCI) in cooperation with the General Authority of Zakat and Tax (GZAT) will intensify its inspection tours of markets and companies to detect commercial violations before Value Added Tax (VAT) comes into force on Jan. 1.

The inspection tours will be carried out under the supervision of the joint operations room for consumer protection which comprises 18 government authorities.

Any tampering with prices will be dealt with firmly. Penalties will be imposed on the spot, the MCI said.

The ministry is continuously monitoring that the supply of commodities is abundant which provides consumers many options.

The General Authority of Zakat and Tax (GAZT) called on consumers to make sure that any receipt for commodities or services should contain the date of issuance, the issuing company’s VAT identification number, the percentage of VAT (5% or 0% if exempted).

Companies should have clear receipts specifying the commodities and services exempt from VAT.

Consumers can verify whether a company has VAT registration by entering the company’s 15-digit VAT number through the link www.vat.gov.sa/ar/vat-taxpayer-lookup.

Companies which issue VAT invoices without registering in the VAT system will be fined a maximum amount of SR100,000, the General Authority of Zakat and Tax (GAZT) said.

Companies with an annual revenue of more than SR1 million which have not yet registered for VAT will be fined SR10,000.

VAT payment avoidance will result in 5% fine of the VAT value that has not been paid for each or part of the month.

Non-declaration of VAT during the specified period will result in a minimum fine of 5% and a maximum of 25% of the tax value which should have been declared.

The companies which fail to comply with VAT regulations will be deprived of many government services.