10/18/2017 8:26:43 AM cpa club 2 years ago
Normally, the supplier of goods or services pays the tax on supply. In the case of Reverse Charge, the receiver becomes liable to pay the tax to the government (Reversed). As per Saudi VAT Law any sales (B2B) between registered dealers in the GCC will be subject to reverse charge mechanism.
When a transaction is subject to Reverse Charge, the recipient of the goods or services reports both their purchase (input VAT) and the supplier’s sale (output VAT) on their VAT return. These two declarations offset each other from a cash payment point of view, but the authorities have full visibility of the transactions.
When Reverse charge mechanism apply
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