Saudi Arabia’s General Authority of Zakat and Tax has announced that firms must register for value added tax (VAT) by the end of this August.
The Saudi Gazette reported that the authority stated an August 26 registration deadline for organisations with an annual turnover above SAR375,000 ($100,000).
The Kingdom, along with the rest of the GCC members will implement the 5% VAT rate on goods and services from January 1, next year.
The tax will apply to goods, services and supplies unless exempted or zero-rated.
However, many businesses are unprepared for the implementation of VAT, despite the approaching deadline.
A survey by ACCA and Thomson Reuters, released last month, showed that out of 330 respondents, 88% of GCC businesses were unprepared for the tax and only 11% understood the impact VAT would have on their businesses.
Additionally, only 18% of respondents said they had sufficient resources for VAT implementation.
Eligible businesses that fail to register for VAT before the August deadline may be subject to a SAR10,000 fine.