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E-Business Suite Release 12: Saudi Arabia VAT Introduction, January 2018 (Doc ID
2319383.1)

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Oracle E-Business Suite

Oracle Financials for EMEA
Information in this document applies to any platform.

MAIN CONTENT

Oracle E-Business Suite: India Goods and Service Tax (GST) (August 2016), Release 12

In this Document

Section 1: Introduction
1.1 Purpose
1.2 Saudi Arabia VAT Introduction, January 2018
Section 2: Oracle E-Business Suite Release 12 Solution
Section 3: Implementation
Section 4: Download Details
Section 5: General Authority for Zakat and Tax (GAZT) VAT Introduction Updates
Change Record

Section 1: Introduction

1.1 Purpose

The objective of this note is to assist customers of E-Business Suite to understand the status of the Legislative Update:
Saudi Arabia VAT Introduction

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WITHOUT RISKING SIGNIFICANT DESTABILIZATION OF THE CODE.

1.2 Saudi Arabia VAT Introduction

In February 2017, all Gulf Cooperation Council (GCC) countries signed the United Agreement for VAT.

This common VAT framework is an overarching supra-national instrument below which each member state has to enact its
own VAT executive law. To date, the general approach for the GCC United Agreement for VAT is largely consistent with the
European model.

In light of the various VAT laws published so far in preparation of the 1 January 2018 VAT launch, key VAT features are as
follows:
 Scope of VAT – VAT is imposed on all taxable supplies of goods and services made in Saudi Arabia by a taxable
person or received in Saudi Arabia by a taxable person where the reverse charge mechanism applies and on imports
of goods.
Rates:
A 5% VAT rate on supplies and imports
A zero rate on export of goods, services supplied to customers outside the GCC, international and intra-GCC
transportation, investment grade precious metals, medicine and medical equipment
Exempt for leases of residential real estate, life insurance and margin-based financial services
Tax Registration:
Businesses must register by December 20th, 2017 If their annual turnover exceeds the mandatory
registration threshold of SAR 375,000 ($99,920). Businesses with turnover of less than SAR 1 Million can
defer registration until December 31, 2018 and businesses that make exclusively zero rated supplies may
register voluntarily even if the value of the supplies exceed the mandatory registration threshold.
Related companies may apply for VAT group registration subject to certain conditions.
Date of supply, value of supply/imports/ special cases: the date of supply for taxation purposes is deemed to be the
earliest of date of invoice, payment date or date of supply.
Place of supply of goods and place of supply of services rules, special cases: The place of supply for electronic and
telephonic services will be based on the location of the consumption.
Reverse charge application for imports and movements from other GCC VAT implementing Member States, in case
of transactions involving non-resident suppliers (This includes resident electronic marketplaces and portals where
the operator buys from a non-resident provider an e-services for onward supply to local consumers)

Tax invoice and its conditions of issuance:

Invoices must be issued by at least the 15th of the month following the taxable supply for all taxable supplies
and/or related payments
Invoices should include the following details: Date of invoice (and date of supply if different),Unique,
sequential invoice number, VAT ID number of the supplier, name and address of the supplier and
customers, description and quantity of the goods supplies; nature of services provided, gross, VAT
and net values of supply, VAT rate applied, and explanation where not the standard rate
Simplified invoices are permitted where the taxable supply is below SAR 1,000
Electronic invoices must be issued where prescribed by the tax authorities
Invoice credit or debit notes must contain a reference to the original sales invoice number, plus any details of
a discount

Tax return and payment of VAT due: Businesses with taxable supplies exceeding SAR 40 Million will be required to
submit VAT returns on a monthly basis and all other persons will be required to file returns on a quarterly basis. The
VAT return and payment will be due within a month from the end of the tax period.

Information to be submitted in the return includes: Standard rated domestic sales, Sales to registered customers in
other GCC states, Zero rated domestic sales, Zero rated exports, Exempt sales, Standard rated domestic purchases,
Imports subject to VAT paid at customs, Imports subject to VAT accounted for through the reverse charge
mechanism, Zero rated purchases, Exempt purchases, Corrections from previous period (up to 5,000 SAR)
Errors and corrections: corrections above 5,000 SAR to already submitted returns must be done by a separate
electronic communication to correct the return.

Transitional rules: there are various transitional provisions including a provision that deals with contracts entered
into before 30 May 2017 that are silent on VAT.

Section 2: Oracle E-Business Suite Release 12 Solution

The VAT laws hold a lot in terms of VAT component definitions and VAT rules, but nothing so far that Oracle E-Business
Suite Release 12E-Business Tax cannot provide through its extensive functionality for VAT calculation and preparation for
reporting. E-Business Tax is configurable and scalable to enable adding and maintaining country specific tax rules and
content.

Oracle will continue to monitor and assess any new VAT law and implementing regulations to measure impacts on our
applications.

Section 3: Implementation
Existing guidance

Oracle Financials Cloud Implementing Tax

Tax Configuration
Oracle E-Business Tax
 Implementation Guide PDF
Oracle E-Business Tax
User Guide PDF
Oracle E-Business Tax Reporting (EMEA Tax Reporting)
Guide PDF

Coming Guidance

Example of Document Sequencing configuration targeted to VAT return justification and reconciliation will be
proposed soon together with examples of VAT setup (VAT key components, VAT calculation rules and VAT
Reporting rules (ERP Cloud only)). The proposed configuration documents are examples that have to be
adapted by each Business based on its market segment and activities.

Section 4: Download Details

There is no patch available for Saudi Arabia VAT Introduction. Please follow the implementation details mentioned above.

Oracle will continue to monitor and assess any new VAT law and implementing regulations to measure impacts on our
applications.

Section 5: General Authority for Zakat and Tax (GAZT) VAT Introduction
Updates
Legal compliance target: January 1, 2018

Main Government Status Comment

Steps
Signature of the United Complete
Agreement for VAT by
the 6 member states of
GCC
GCC countries signed the United Agreement for VAT on 15-Feb-2017. The Unified
Agreement for VAT of the Cooperation Council for the Arab States of the Gulf was
published on 20-Apr-2017. This agreement is to set forth the unified legal framework
to introduce VAT in the GCC states, which will be imposed on the supply of goods &
services

Publication of the VAT Complete General Authority for Zakat and Tax (GAZT) issued its VAT draft law on 29 May 2017
draft law and opening and opened a public consultation (Feedbacks were due by 29 June 2017)
for consultation
Approval and Official Complete The VAT Law was officially approved and published on 28 July 2017.
publication of the VAT This primary legislation in KSA:
law
Gives effect to GCC agreement, governing how VAT is administered
Sets out VAT implementation and VAT compliance enforcement

Opening of VAT Complete GAZT commenced the VAT registration of companies and businesses or entities during
registration the first week of September 2017. The GAZT launched an official website exclusively
for VAT. The GAZT has announced on its website that businesses with a threshold
annual taxable supplies of goods and services in excess of SAR 375,000 (US$100,000)
are required to register for VAT before 20 December 2017
Publication of the final Complete GAZT released the final Implementing Regulations on 26 August 2017.
VAT implementing laws The final implementing Regulations are the secondary domestic legislation to provide
further details; they Provide additional rules and interpretation of the GCC agreement
and the VAT Law

Change Record
This document will be updated with new information as it becomes available.

Date Description of Change

19-Oct-2017 Initial publication

My Oracle Support Knowledge Document by Oracle E-Business Suite Development

 REFERENCES
NOTE:973912.1 - E-Business Suite Globalization Center
NOTE:871204.1 - E-Business Suite Financials Legislative Updates Center

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