Fixer le traitement TVA d'un contrat de construction saoudien

Record the VAT registration of the employer and of your own entity, whether either is a government body, and where the works are. Where the client is not resident, note that the works are on land in the Kingdom, which is what decides the place of supply for a construction or a real estate related service.

Pourquoi: The commonest Saudi VAT error on a construction contract is treating a foreign client as an export customer. Services connected with real estate follow the real estate, so a design or supervision fee billed to a company abroad for a building in Riyadh is taxed here at the standard rate. Writing that down at contract stage costs nothing. Discovering it at assessment costs the tax plus the penalty, and the client has usually gone home.

Go through the bill and mark which sections are standard rated at 15 percent, which are zero rated, which are exempt and which fall outside the scope of the tax. On most building contracts every section is standard rated and the work is proving it rather than finding exceptions, which is a five minute job that removes a monthly argument.

Pourquoi: Zero rated and exempt look the same on an invoice and behave in opposite ways behind it. A zero rated supply is taxable at nought and carries a full right to recover the input tax on what went into it. An exempt supply carries none, so the tax on your materials becomes a cost rather than a receivable. A bill that marks both as 0 percent hides the difference and only pays for it at the return.

For each certified stage, record the date of supply the tax is due on, the date the invoice was issued and the date payment was received, and let the earliest of the events the regulation recognises decide which return period the output tax belongs to. Advances and payments on account are supplies in their own right and belong in the period they were received, not the period the work was done.

Pourquoi: A construction contract runs for years and is billed in slices, so the question is never whether tax is due but which month it is due in. An advance taken in one quarter and set against work done in the next is the classic case, and a contractor who accounts for the tax when the work happens rather than when the money arrived is late on a supply he has already been paid for.

Where the job ends in a sale, model the two supplies separately: the disposal of the real estate, which carries the real estate transaction tax at 5 percent and not VAT, and the contracting, design and management services, which stay standard rated. Residential letting is exempt, and an exempt income stream restricts what input tax the scheme can recover, so it belongs in the appraisal rather than in a footnote.

Pourquoi: The October 2020 change took real estate disposals out of VAT and put the 5 percent transaction tax in their place, and it is still the point where developer appraisals go wrong, in both directions. A scheme that adds 15 percent to a sale price prices itself out. A scheme that assumes full input tax recovery on units it will let residentially is short by the tax on everything it built them with.

For every specialist engaged from outside the Kingdom, record two separate obligations against the same invoice. VAT is accounted for by you under the reverse charge, as output tax with the matching input deduction. Withholding tax is deducted from the payment at the rate the type of payment attracts and paid over separately, and a treaty position, where there is one, is evidenced rather than assumed.

Pourquoi: These are two different taxes on one payment and they are usually handled by two different people who each think the other has it. Reverse charge VAT is broadly cash neutral and still has to appear on both sides of the return. Withholding is real money leaving, and it is the payer who is liable for it, so an amount paid gross abroad is an amount the payer will be asked for again later.

Match the input tax you intend to recover to the document that supports it: a valid tax invoice from a registered supplier, or the import declaration for goods brought in. Separate out what is blocked or restricted, entertainment and private use being the usual ones, and anything attributable to an exempt supply.

Pourquoi: Input tax is a deduction the taxpayer has to prove, not a figure the accounting system computes. On a site with hundreds of small purchases, the tax deducted against a receipt that is not a valid tax invoice is the amount that comes back with interest, and it is invisible in the ledger because the number itself was right.

Produce the period figures with the documents behind each of them: output tax by treatment, input tax by evidence type, reverse charge on both sides, and the adjustments made for credit notes cleared in the period.

Pourquoi: ZATCA already holds the cleared invoices, so the return is a claim that can be checked against records the authority produced. The value of the trail is not the filing, it is the question two years later, when the person who prepared it has moved on and the only defence is the working that came with the figure.