Checklist for Input VAT Deduction | Saudi VAT

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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