VAT Key Definitions

VAT is imposed on the import and supply of Goods and Services at each stage of production and distribution, including “Deemed Supplies”.

A Person carrying out an Economic Activity independently for the purpose of generating income, and who is registered or obliged to register for VAT purposes in accordance with the provisions of this Law.

An activity that is conducted in an ongoing and regular manner for the purpose of generating income, and includes commercial, industrial, agricultural or professional activities or services or any use of tangible or intangible assets, and any other similar activity.

The place where a business is legally established; or where its actual management centre is located where key business decisions are made if different from the place of establishment.

Any fixed location for a Business other than the Place of Business, in which the business is carried out and is distinguished by the permanent presence of human and technical resources in such a way as to enable the Person to supply or receive Goods or Services.

The location where Place of Business or any other type of Fixed Establishment is. In the case of a natural person, if he does not have a Place of Business or Fixed Establishment, it will be his usual place of residence. If a Person has a Place of Residence in more than one State, the place of residence will be considered to be in the place most closely connected with the supply.

The entry of Goods from outside the territory of the Implementing States into the Kingdom, in accordance with the provisions of the Customs Law.

A Supply of Goods from the Kingdom to outside the territory of the Implementing States in accordance with the provisions of the Customs Law.

The VAT borne by the Subject to VAT Person in relation to Goods or Services supplied to him or imported for the purpose of carrying out an Economic Activity.

VAT collected on sales.

Input VAT that may be deducted from VAT due on Supplies for each VAT period in accordance with the Agreement and Local Law.

The VAT resulting from subtracting the Deductible VAT in the Kingdom from the VAT due in the Kingdom during the VAT Period, and the Net VAT shall be either payable or refundable.

Any form of Supply of Goods or Services in exchange for Consideration in accordance with the provisions of this Law.

Supplies on which VAT is imposed, whether at the standard or zero rate, and from which related Input VAT may be deducted, in accordance with the provisions of this Law.

Supplies on which VAT is not imposed, and from which related Input VAT incurred may not be deducted in accordance with the provisions of this Law.

Supplies made by a Supplier Resident in the Kingdom to a Customer Resident in an Implementing State, or vice versa.

First customs point of entry through which Goods enter the council state territory from abroad in accordance with the Customs Law.

Customs point of entry through which Goods enter the final destination State within the GCC territory.

Any written or electronic document containing the details of a Supply, that the Subject to VAT Person is obliged to issue in accordance with the provisions of this Law.

The data and information specified for VAT purposes which the Subject to VAT Person shall disclose in accordance with the form prepared for such purpose by the Bureau.

The time period for which the Net VAT shall be calculated and the VAT Return submitted.

The minimum value of actual Supplies by which a Subject to VAT Person becomes obliged to register for VAT purposes.

The minimum value of actual Supplies, by which a Subject to VAT Person may request to register for VAT purposes.

It is a mechanism by which the recipients of subject to VAT services calculate VAT payable instead of the non-resident supplier, that is, the recipient acts as if the supplier and the recipient are together for VAT purposes and self-assesses the VAT that is due and records the process in his VAT returns.