Checklist for Input VAT Deduction
|Checklist for Input VAT Deduction in Saudi Arabia|
|Supplies eligible for input tax deduction||In case of imports, the customs document proving the import of goods|
|Taxable supplies within Saudi Arabia||Goods which are lost, damaged or stolen should be reported as such in the accounting records. In addition, police reports and insurance claims documentation may be required|
|Imports from other GCC States||Supplies ineligible for input VAT deduction|
|Imports from non-GCC States||Any form of entertainment, sporting or cultural services|
|Time to claim input VAT deduction||Catering services in hotels, restaurants and similar venues|
|If the business uses the accrual accounting method, input tax deduction should be claimed in the tax period in which the invoice for the supply is recorded||Purchase or lease of restricted motor vehicles. ‘Restricted motor vehicle’ is any vehicle designed to be used on the road, which is not used exclusively for work purposes or is intended for resale|
|If the business uses the cash accounting method, input VAT deduction should be claimed in the tax period in which the payment for the supply is made||Repair, alteration, maintenance or similar services on restricted motor vehicles|
|Maximum time for claiming input VAT deduction is 5 calendar years after the calendar year in which the supply takes place||Fuel used in restricted motor vehicles|
|Documents for claiming input VAT deduction||Any other goods or services used for a private or non-business purpose|
|Tax Invoice||Note: If any of these supplies are directly supplied by the taxable person onwards to another person, input tax is allowed to be deducted on these supplies|
Input VAT Deduction is the heart of compliance under VAT in Saudi Arabia. The provision of input tax deduction to persons registered under VAT ensures that a product or service is taxed only on the value added to it and hence, avoids double taxation in the supply chain. There are various factors which influence a person’s eligibility to claim input tax deduction on inward supplies. This checklist can be used by registrants to ensure that input tax deduction is being claimed on eligible supplies and in the required manner.
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