December 20, and not August 26, is the deadline for VAT registration in Saudi Arabia, the government clarifies.

Ankush is a journalist hailing from India, who has edited and written for publications in his home country, the UAE, US, and UK. Previously the editor of Gulf Business in Dubai and of Entrepreneur in India, Ankush is a keen student of economics, a follower of Manchester United since 1996 and a disciple of Archer.

Saudi authorities have clarified that December 20 is now the deadline for mandatory Value Added Tax (VAT) registration in Saudi Arabia, ending days of confusion and speculation in financial and business circles.

At the end of July, Saudi authorities had released a gazetted notification, referring to a deadline of 30 days from publication without offering a firm date, prompting many media outlets including Inc. Arabia to interpret the date as August 26 (30 days from July 28).

This surprised many corners of the business community, especially since the online VAT registration portal was not expected to go live by that date.

“The draft VAT law, which was issued on 29 May, did not mention a specific deadline for VAT registration,” Shiraz Khan, team leader of the Middle East tax practice at the Al Tamimi and Co. law firm in Dubai, told Bloomberg BNA.

Khan noted that given that there was no way for registering online, it was not possible for all taxpayers to register in practice within this timeframe.

In addition, public consultation on the draft law doesn’t end until August 19.

However, a notification on the government’s dedicated website for VAT has now clarified that all companies, businesses or entities which make an annual taxable supply of goods and services in excess of SAR375,000 are legally required to register December 20, 2017.

The online registration portal will open on August 28 for this purpose.

The website noted that taxable persons whose annual taxable supplies exceed the mandatory registration threshold but don’t exceed SAR1,000,000 riyals ($266,638) will be exempted from the requirement to register for another year.

Those supplying in excess of SAR187,500 riyals can register voluntarily.

“Voluntary Registration provides significant benefits for the companies since it allows the deduction of input tax,” the website said.

Saudi Arabia is expected to be one of two states along with the UAE in the Gulf that will keep to the January 1, 2018 deadline to implement VAT in their economies. 

UAE businesses will be able to register for VAT online beginning September 15, the head of the country’s new tax authority said Tuesday.