TAX ALERT MARCH 2020
Economic incentives to counter the effects of the spread of the Coronavirus (COVID-19) pandemic crisis
Within the package of initiatives undertaken by the Kingdom of Saudi Arabia government and efforts to counter the effects of the spread of the Coronavirus (COVID-19) pandemic on various economic sectors, and to monitor its impact on the financial markets and the economy. Several ministries and government authorities have issued measures to mitigate the effects of low cash flows, including:
Zakat and TAX
The period of filing and settling Zakat and Tax has been extended for three months for all taxpayers whose their financial year ends on 31 December 2019. The new deadline for submitting and settling the liability will be 29 June 2020 instead of April 2020. Also, all penalties and fines resulting from the late submission and payment will be waived.
Withholding Tax
The period of filing and settling withholding tax return has been extended for the return falls in the period between 19 March 2020 till 30 June 2020 for three months. Also, all penalties and fines resulting from the late submission and payment will be waived.
Value Added Tax (VAT)
The period of filing and settling VAT return has been extended for the return falls in the period between 19 March 2020 till 30 of 30 June 2020 for three months. Also, all penalties and fines resulting from the late submission and payment will be waived.
The measures also included
1. Postponement of payment of VAT and Excise tax payable in customs for three months.
2. Suspended the procedure of stopping the government service or sizing funds for the stipulated period.
3. Granting the Tax and Zakat certificate of 2019 without any restrictions.
4. Expediting the refund process.
Additional measures from other government authorities also included:
1. Postponing the collection of customs duties due on imports with a bank guarantee for three months.
2. Exemption from financial compensation for expatriates whose residency expired from the date of 18 March 2020 to 30 June 2020, by extending their residency period for three months without charge
3. Allowing employers to recover the fees for issuing work visas that were not used during the period of the ban on entry and exit from the Kingdom even if they were stamped in the passport, or extended for three months without charge.
4. Allowing employers to extend exit and return visas that were not used during the period of the ban on entry and exit from the Kingdom for three months without charge.
5. Supporting the employment of male and female citizens recruited in the private sector retroactively from the beginning of July 2019 through the Human Resources Development Fund (HRDF).
