What is the General Authority of Zakat and Tax

Tally Solutions | Updated on: August 14, 2023

On May 4, 2021, The Saudi Cabinet approved the merging of the General Authority of Zakat and Tax (GAZT) with the General Authority of Customs to form one Authority under the name of the ‘Zakat, Tax and Customs Authority (ZTCA).

The Authority undertakes to collect customs duties, Zakat and tax and reaching the most elevated level of taxpayers’ compliance in conformity with the most promising techniques by providing high-quality services.

This step came among the Saudi efforts to restructure government agencies to accelerate the implementation of the Vision 2030 national transformation plan.

What is the role of GAZT?

• Increasing awareness among taxpayers, improving the understanding and voluntary commitment to compliance and GAZT requirements
• Collecting Zakat and tax in conformity with law & regulations
• Providing high-quality services to support taxpayers in fulfilling their duties
• Liaising with taxpayers and taking the necessary actions to secure the collection of dues
• Representing Saudi Arabia in regional and international forums and conferences
• Cooperating and swapping experience and best practices with regional and international bodies and organizations

How to get your Zakat Certificate?

For all Taxpayers in Saudi Arabia, if they have no cases of late returns or payments, nor no liabilities present. They can easily request their Zakat Certificate by doing the following steps:

• Log in ZATCA portal
• Go to "Zakat" tab
• Select "Request for certificate"
• Select "New Request"
• Fill in the requested form
• You will receive your certificate

The difference between VAT and ZAKAT

Zakat is collected in accordance with Sharia. Zakat is the third pillar of Islam. Islamic states are entrusted with administering and supervising the collection of Zakat on declared funds and their distribution to the needy.

The Zakat Payer is a natural or legal person who carries on activities subject to Zakat under the Regulations, whether a sole proprietorship, corporation or a person engaged in a business activity under a license issued by a competent authority.

VAT is an indirect tax that is imposed on the importation and supply of goods and services, with certain exceptions. VAT is imposed in more than 160 countries around the world. VAT is collected from taxpayers in Saudi Arabia in accordance with The Unified Agreement for Value Added Tax for the Cooperation Council for the Arab States of the Gulf.

Who should register for GAZT?

Under the GCC Unified VAT Agreement, any business with an annual turnover exceeding SAR 375,000 is required to register for VAT. Businesses with annual revenues between SAR 187,500 and SAR 375,000 have the option to register for VAT, which will allow them to claim VAT input tax. Businesses with revenues underneath SAR 187,500 are exempted from registration.

The registration portal can be reached through the dedicated VAT website - VAT.GOV.SA - launched by GAZT last month. The new website features a range of resources to help businesses prepare for VAT.

What are the benefits of GAZT registration?

• Online Portal: Your business receives a notification of registration through SMS and e-mail. The certificate of the electronic registration is attached to the notification, which enables you to manage all its commercial activities via one e-account only.
• Recover tax paid: VAT registered businesses will be eligible to recover VAT paid on purchases or expenses incurred in the course of business.
• Avoid penalties: In case the business’s turnover exceeds the threshold limit of SAR 375,000 and the business has not registered, it has to pay heavy penalties for not registering.
• Verify Service: GAZT provides a service to verify the Zakat certificate for any business by entering the VAT Certificate No., TIN, or Commercial Registration No.
• Authorize Service: GAZT provides (Foudh) service for businesses where they can authorize accounting offices and service providers to complete procedures and transactions, and identify the duration of authorization.
• Immediate Certificate: GAZT allows enterprises to submit their Zakat estimated return through the (Immediate Certificate) service.

How can TallyPrime help?

TallyPrime, a complete business management software is accredited by Zakat and Tax authority ZATCA (GAZT) as a compliant e-Invoicing (FATOORA) software. With the experience of 30+ years in the market which has gained the trust of more than 2 million businesses worldwide, TallyPrime helps your business generate and manage e-invoicing with ease and takes care of every little detail to bring you the most delightful experience. Below are some of the key features of TallyPrime:

• TallyPrime is designed to archive the invoice details in XML format as per ZATCA (GAZT) requirement
• Generate e-invoice for tax invoices and simplified invoices in a single click
• Supports e-invoices for a tax invoice, simplified invoice, debit notes, and credit notes
• Print QR codes on invoices effortlessly
• Generate VAT compliant invoices
• Accurate VAT returns filing
• An exclusive e-invoice report will give you a view of all e-invoicing tasks, activities, and complete history of transactions
• Security control and User login management
• Log details indicating the entire history of the masters & transactions

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