A VAT-registered Saudi supplier delivers goods to a customer on 10 March, issues the VAT invoice on 15 March, and receives full payment on 25 March, with no continuous-supply contract or agreed periodic payment terms involved. Under the Saudi VAT Implementing Regulations' general date-of-supply rule, on which date does the VAT become due?
- 25 March, the payment date, because VAT always becomes due only once consideration has actually been received by the supplier
- 15 March, the invoice date, because the invoice date always governs the date of supply regardless of when delivery or payment occurs
- A date chosen at the supplier's discretion among the three, provided it is applied consistently across all of the supplier's transactions for the tax period
- 10 March, the earliest of the delivery date, invoice date and payment date, since the general date-of-supply rule fixes VAT liability at whichever of those events occurs first
Why D? And why not the others?
Correct answer: D. 10 March, the earliest of the delivery date, invoice date and payment date, since the general date-of-supply rule fixes VAT liability at whichever of those events occurs first
The general date-of-supply rule fixes VAT liability at whichever of three events happens earliest: the date goods or services are supplied, the date the VAT invoice is issued, or the date consideration is received, so with delivery on 10 March, invoicing on 15 March and payment on 25 March, VAT becomes due on 10 March, the earliest of the three. The option fixing the date at payment receipt is wrong because payment is only one of three possible triggering events, not the exclusive or default one, and here it is the latest, not the earliest, of the three. The option fixing the date at invoice issuance is wrong for the same reason: the invoice date only governs when it happens to be the earliest event, which is not the case in this fact pattern. The option allowing the supplier to choose among the three dates at its own discretion is wrong because the rule is a fixed earliest-of test applied automatically, not an elective policy the supplier sets for itself.
Source: Saudi VAT Implementing Regulations, Article 20, general date-of-supply (basic tax point) rule (zatca.gov.sa)