As part of the regulatory efforts aimed at developing the VAT system and achieving greater efficiency and legislative clarity, the Board of Directors of the Zakat, Tax and Customs Authority approved important executive amendments that were included in the executive regulations of the system, which came into effect immediately upon their publication in the official gazette “Umm Al-Qura”.

These amendments included a package of new procedures and controls that directly affect tax groups, practices associated with the cancellation of economic activity, tax refunds for tourists, as well as changes in the tax treatment of certain goods and services.

A grace period to regularize the status of tax groups

According to the new decision, the Authority granted representatives of tax groups registered with it before the issuance of the amendments a period not exceeding 180 days from the date of publication of the decision to regularize their status in accordance with the amendments contained in Article 10 of the Executive Regulations.

Special exception starting in 2026

The decision also provided for an exception related to the third paragraph of Article 47 of the Executive Regulations, as its new provisions will be applied as of January 1, 2026, allowing more time to prepare and adapt to future changes.

New procedures when ceasing or relinquishing the activity

The amendments included controls related to the cessation of the taxable person from practicing the economic activity, or in the event of the loss of his legal status, or abandoning the activity, where he is required to cancel his registration, and the cancellation is effective from the date specified by the Authority after fulfilling all tax requirements.

Added paragraphs were added to the amendments. Two paragraphs have been added to Article 13 of the Regulations, requiring the assignee to inform the Authority within 30 days from the date of the assignment, in addition to the continued obligation of the deregistered taxpayer to maintain documents and records, and not to prejudice the payment of any previous dues.

Enhancing the tax refund mechanism for tourists

<The first paragraph of Article 73 was amended to allow the Authority, in accordance with a mechanism to be determined by it, to allow tax refunds for purchases of eligible goods that tourists carry with them when they leave the Kingdom. The second paragraph was also amended to authorize the authorization of specialized service providers to facilitate this refund.

In an additional step to standardize treatment, a new paragraph (No. 11) was inserted in the same article, stating that tourists coming from GCC countries will be treated as non-GCC tourists until the implementation of the e-service system stipulated in Article 79 of the regulation.

Changes to the customs treatment of some goods

The amendments repealed the seventh paragraph of Article 32, which granted a zero-tax exemption for certain goods under the duty suspension regime subject to certain evidence.

On the other hand, a new Article 32 bis was added, stipulating that the supply of goods to suspended duty positions, as well as the supply within those positions, is subject to zero percent VAT, provided that the provisions of the Unified Customs Law are applied.

The amendments removed the seventh paragraph of Article 32, which granted a zero-rated VAT exemption for some goods under the suspension of customs duties, subject to the provision of evidence. <The new article also stipulates that the tax due when goods are imported into these positions is suspended, but is due upon release in accordance with the procedures specified in the Customs Law. Goods exiting these situations to outside the GCC countries shall be treated as exports.

The new article also stipulates that the tax due when importing goods into these situations shall be suspended.

For details of the amendments to the executive regulations of the VAT system Click here