GTL Summary:

Document Type: IR - Implementing Regulations
Law: Value Added Tax Law
Decision Number: 3839-article-79
Year: 2016
Country: 🇸🇦 KSA
Official Name: Article 79 - Transitional Provisions
Last updated at: 2025-11-27 14:38:44 UTC

Chapter 12 - General Provisions

Article 79 - Transitional Provisions

  1. If an invoice is issued or Consideration is paid before the commencement date of the Law in respect of a Supply which occurs on or after the commencement date of the Law in accordance with the provisions of this Article, the Supplier of the Goods or services shall be considered to make a Taxable Supply on the date the Goods or services are supplied, in accordance with the Agreement. In such cases the Taxable Person shall issue an additional invoice showing the Tax charged on the Supply of Goods or services, unless this Tax was included on the invoice issued before the commencement date of the Law.

  2. For the purposes of this Article, the date of a Supply occurs on or after the commencement date of the Law in the following cases:

    1. if the date when Goods are delivered or made available occurs on or after the commencement date of the Law,

    2. if the date when the performance of services is completed occurs on or after the commencement date of the Law.

  3. Any Supply of Goods or services made in respect of a contract which does not anticipate the application of VAT to the Supply may be treated as zero-rated by the Supplier until the earlier of the time the contract expires, is renewed or 31 December 2018 provided that:

    1. the contract was entered into before 30 May 2017;

    2. the Customer is entitled to deduct Input Tax in respect of the Supply of Goods or services in full or is an Eligible Person entitled to a refund of the Tax; and

    3. the Customer provides a written certification to the Supplier that Input Tax is able to be deducted or refunded in full on the Supply.

  4. Any Person who is a Resident Person and carrying on an Economic Activity as at the date these Regulations come into force or at any date up to and including 20 December 2017 shall:

    1. make an estimate of annual turnover for the year commencing 1 January 2018,

    2. apply to the Authority for registration in cases where the value of annual Taxable Supplies in this year is expected to exceed the Mandatory Registration Threshold.

      The Authority shall for the purposes of Paragraph 5(a) of Article 3 of the Law, have the discretion to accept late registrations under this Article save that the last date for any registration to which this Article applies shall be 20 December 2017.

  5. As a transitional measure the Authority may register Persons who are expected to be required to mandatorily register in advance of 1 January 2018. All registrations under the fourth and the fifth Paragraph of this Article will be effective from 1 January 2018.

  6. For the purposes of the Law, any Member State which has not introduced VAT, or which does not have an Electronic Services System in place with the Kingdom shall be considered a country outside the Council Territory in accordance with the Agreement. An Internal Supply made with such Member State shall be considered to be made with a third country outside Council Territory. A Person who is a resident in such Member State shall be treated as a resident of a third country outside Council Territory. [145]

  7. Supplies of goods before the introduction of the electronic services system shall be treated as follows:

    1. When a taxable person receives goods in the Kingdom from another Member State, the person shall be considered to have imported the goods into the Kingdom, and tax shall be collected in accordance with the provisions governing importation.

    2. For the purposes of Value Added Tax, supplies of goods involving the transfer of goods from the Kingdom to another Member State shall be treated as exports of goods. [146]

  8. For the purposes of these Regulations, the date of introduction of the Electronic Services System will be formally announced by the Authority by way of an order issued by the Authority.

  9. Notwithstanding any other provision of the Law and these Regulations a Person whose value of annual Supplies exceeds the Mandatory Registration Threshold but does not exceed one million (1,000,000) SAR is exempted from the requirement to register in the Kingdom until 1 January 2019. However, any application for such registration must be submitted that on or before 20 December 2018. This Paragraph does not affect any Person's ability to register on a voluntary basis.

  10. For the purpose of applying the provisions stated in Paragraph 2 of Article 2 of the Law, the modified standard Tax rate shall be applied according to the following: [147]

    1. Notwithstanding Supplies made before 30/06/2020 for which invoices were issues before 11/05/2020 and only to the extent of the value shown in the invoice, if an Invoice is issued or Consideration for Goods or service is paid before 1/7/2020 and the Supply was made after this date, the Tax will be determined based on the date of Supply, regardless of the date of issuing the Invoice of the payment of Consideration. Whereas a consequence of Supply there is a discrepancy between the amount of the Tax due, the Supplier must issue an additional invoice for the difference in Tax due, unless that Tax is included in the Invoice that was issued before the effectiveness day of the amendment to the Law.

    2. With regards to continuous Supplies that are partially executed before 1/7/2020 and partly after that date, the modified Tax Rate shall be applied to the partly executed Supplies after 1 July 2020, with exception for the continues Supplies that have issued Tax Invoices before 11 May 2020, and within the limit of the value stated in that invoice, with the condition that actual Supply takes place before 30 June 2021. Additionally, the supplier may calculate the modified Tax Rate on the total value of the Supply after the customer's approval.

    3. The supplier may treat any Taxable Supplied Goods or services related to a contract dated before 11 May 2020 as a supply subject to the basic Tax Rate before adjustment including all supplies related to the same contract for all supplies made under that contract until the date of expiry, renewal or by 30 June 2021 whichever is earlier. In condition that both the supplier and the customer are registered as Taxpayers in the Tax system. The customer may deduct full amount of the Income Tax related to the Supply of the Goods and services supplied under this contract.

    4. The supplier may treat any Taxable Supply of Goods or services related to a contract signed or awarded through a governmental entity before 11 May 2020, as Supply subject to the basic Tax Rate before adjustment including all Supplies related to the same contract for all Supplies made under that contract until the date of expiry, renewal or by 30 June 2021 whichever is earlier.

Footnotes

[145]Amended pursuant to the decision of the Board of Directors of the General Authority of Zakat and Tax No. (19-3-9), dated 30 Shawwal 1440H (corresponding to 3 July 2019G).
Prior to the amendment, the paragraph read as follows
'For the purposes of the Law, any Member State that has not commenced the application of Value Added Tax after 1 January 2018 shall be treated as a state outside the territory of the GCC States. A supply that, in accordance with the provisions of the Agreement, is considered to have taken place in a Member State that has not begun applying Value Added Tax at the time of supply shall be treated as a supply taking place in a third country outside the territory of the GCC States, and persons resident in such states shall be treated as residents of a third country.'

[146]Amended by the decision of the Board of Directors of the General Authority of Zakat and Tax No. (9-3-19) dated 30 Shawwal 1440H corresponding to 03 July 2019G.
Prior to the amendment, the paragraph read as follows

  1. 'Before the introduction of the electronic services system in all Member States:

    1. A taxable person who receives goods in the Kingdom from another Member State, before the implementation of the electronic services system in all Member States, shall be considered to have imported the goods into the Kingdom, and tax shall be collected in accordance with the provisions governing importation.

    2. For the purposes of Value Added Tax, supplies of goods involving the transfer of goods from the Kingdom to another Member State, before the implementation of the electronic services system in all Member States, shall be treated as exports of goods. '

[147]Paragraph (10) was added to Article 79 by decision of the Board of Directors of the General Authority of Zakat and Tax No. 2-3-20 dated 17 Shawwal 1441H corresponding to 09 June 2020G.

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