Indirect Tax News - October 2021

Tax authorities issue VAT e-commerce guide

The Saudi General Authority of Zakat and Tax released a guide for e-commerce companies and transactions in August 2021, which provides some detailed information that will be helpful to any business providing e-commerce supplies to or from Saudi Arabia. 

The guide defines e-commerce as the process of buying and selling goods or services through a website, an electronic platform, or a store in social media or an app and transferring money and data to complete the sale.

 Forms of e-commerce covered in the guide include:

  • Business-to-consumer (B2C) supplies
  • Business-to-business (B2B) supplies
  • Business-to-business and business-to-consumer (B2B2C) supplies
  • Direct supplies to a consumer (D2C)
  • Supplies from one consumer to another consumer (C2C)
  • Supplies from a consumer to a business (C2B)

The guide emphasizes the mandatory registration requirements in the Saudi VAT implementing regulations. This is important in the context of e-commerce supplies since any supplies of goods and services treated (for purposes of the VAT place of supply rules) as having been made in Saudi Arabia to a non-registered customer results in the nonresident supplier having to register for VAT.

Mohammed Madbouly