VAT Refund in KSA for Non-Residents

The Zakat, Tax and Customs Authority (ZATCA) established a portal for the online application filing process and published guidelines in February 2023. The regulations outlining the VAT refund in Saudi Arabia for non-residents. Reyson Badger can assist in navigating the procedure of getting a VAT refund for non-residents from the government.

Eligible persons who have incurred VAT during the calendar year 2022 and are not engaged in economic activity in the Kingdom of Saudi Arabia (‘KSA’) may request a VAT refund by June 30, 2023, in compliance with the terms of VAT Implementing Regulations Articles 70 and 72.

Individuals who do not engage in any economic activity in Saudi Arabia may be eligible to receive a refund of VAT paid in the nation, under the terms of Articles 70 and 72 of the VAT Implementing Regulations. For the 2023 calendar year, an eligible individual must submit their request for an input VAT refund by June 30, 2024.

Eligibility for VAT Refund in KSA

A non-resident person (Company) that is not engaged in any economic activity in the Kingdom of Saudi Arabia (KSA) may request to be regarded as an "eligible person" to apply to get refunded. For this, the following requirements are to be satisfied:

• The non-resident person is based in a nation where the transactional tax system is the same as in the KSA tax system.
• For the purposes of that similar tax regime, the non-resident person is registered with the appropriate tax authorities.
• The non-resident person's home country permits a similar system to refund taxes paid by KSA entities to that country.

Other specified parties (such as foreign governments, international organizations, diplomatic and consular bodies, and missions, etc.) that are not engaged in any economic activity in Saudi Arabia are also permitted by ZATCA to be eligible to receive a VAT refund in Saudi Arabia.

VAT Refund Procedures in KSA for Non-residents

The Zakat, Tax and Customs Authority (ZATCA) had established a portal for the online application filing process outlining the VAT refund process in Saudi Arabia for non-residents.

• Register in online portal (ZATCA) as a person eligible to refund VAT
• Provide all the information with the supporting documents
• Once registered, non-resident persons can file an application for VAT refund in KSA. Non-resident persons can file a refund application within six months of the end of a calendar year.
• The Tax Authority will review the application within an appropriate time frame and may request additional information if needed.

They will issue a notice to the qualified non-resident taxpayer. If the request is approved, then they will refund the amount

A claim for VAT must be submitted for an amount of at least SAR 1,000.  VAT incurred on goods and services mentioned under Article 50 of the Implementing Regulations will not be refunded.

If the submitted application for a VAT refund is approved, payment will be deposited into the eligible person's selected bank account within 60 days from the issuance of the approval notification.

The practical element of this process, including the status of refunds from past calendar years, has yet to be determined, and we anticipate that ZATCA will offer more comprehensive instructions on this in due future.

Key Considerations for Non-Residents incurring VAT in KSA

Deadline - Companies can file a claim for VAT refund within six months of the end of the calendar year. For example, 30 June 2023 is the deadline for submitting the application for the calendar year that ends on December 31, 2022.

Processing time - ZATCA has stated that the applications will be processed in a timely manner in accordance with the standards. The authority emphasized that submitting all the information precisely will speed up the processing of the refund claim.

Dispute - The non-resident business has the right to file an objection with the dispute committee if ZATCA rejects the refund claim in whole or in part.

How can Reyson Badger help?

Our expertise at Reyson Badger is managing the intricate VAT return procedures in the Kingdom of Saudi Arabia. For both individuals and businesses, our committed staff guarantees a seamless and effective reclamation procedure that maximizes your profits while saving you time. We provide thorough support at every stage of the complex VAT refund procedures by streamlining them with our experience and tailored advice.

Contact us for more details on the VAT Refund in KSA for Non-residents!!