Country-specific Sales tax functionality update for Saudi Arabia in Microsoft Dynamics 365 for Finance and Operations, Enterprise edition

The Value Added Tax (VAT) law was published in KSA's official gazette (UM AL-QURA) in its issue number 4681 dated 28 July 2017.

The VAT law indicates that VAT will enter into force from the start of the fiscal year following the date of its publication in the official Gazette, i.e. 1/1/2018. In addition, it gives taxable persons in KSA 30 days from the date of publication of the VAT law to register with GAZT.

The VAT Law defines the introduction of VAT outlined in the Unified Agreement for VAT of the Cooperation Council for the Arab States of the Gulf, it will be applied on 1st January 2018 (H1439/4/14).

The VAT Law was officially approved and published on H1438/11/4.

In order to access the VAT Law, please follow the file of SaudiVATlaw-bilingual.

The VAT Implementing Regulations expanded on the areas cover within the KSA VAT Law, detailing rules for implementation and giving taxpayers sufficient information to complete their VAT compliance requirements. The Implementing Regulations cover: 

The VAT Implementing Regulations were officially approved on H1438/12/4.

In order to access the VAT Implementing Regulations, please follow the file of Value-Added-Tax-Approved-Implementing-Regulations-Bilingual.

New Reverse charge functionality is added to Saudi context.

In cases when a Taxable Customer is obligated to pay Tax on a Supply received from a non-resident Supplier, Tax should be paid by way of the Reverse Charge Mechanism. The Taxable Customer must report the Output Tax on the Supply and any Input Tax (see Regulations to VAT law (Article forty-seven: Persons liable to pay Tax)).
It is necessary to select the Reverse charge check box in the General ledger parameters form (see screenshot below) in order to that this functionality may work.

Before setting the sales tax group, you should set up two sales tax codes: one for input sales tax and other for output sales tax. Output sales tax code should be set up with a negative value. For more information, see Setting up sales tax codes. 

It is necessary to select the Reverse charge check box on the line with the negative sales tax rate (see screenshot below) in the sales tax group. 

When posting the invoice, the system will create two sales transactions: one with Sales tax receivable direction and other with Sales tax payable direction. 

If the language which is set up in the Legal entity form is different from the Customer/Vendor languages set up in the Customer/Vendor form, the system outputs the invoices in two languages.

A user should set up Name/Description of items in different languages in the Released product form, and also Exempt code and Sales tax description.

How to obtain the Microsoft Dynamics AX updates files

This update is available for manual download and installation from the Microsoft Download Center.

• Download update for Microsoft Dynamics 365 for Finance and Operations, Enterprise edition

Prerequisites

You must have the following product installed to apply this hotfix:

• Microsoft Dynamics 365 for Finance and Operations, Enterprise edition

Restart requirement

You must restart the Application Object Server (AOS) service after you apply the hotfix.

If you are encountering an issue downloading, installing this hotfix, or have other technical support questions, contact your partner or, if enrolled in a support plan directly with Microsoft, you can contact technical support for Microsoft Dynamics and create a new support request. To do this, visit the following Microsoft website:

https://mbs.microsoft.com/support/newstart.aspx

You can also contact technical support for Microsoft Dynamics by phone using these links for country specific phone numbers. To do this, visit one of the following Microsoft websites:

Partners

https://mbs.microsoft.com/partnersource/resources/support/supportinformation/Global+Support+Contacts

Customers

https://mbs.microsoft.com/customersource/northamerica/help/help/contactus

In special cases, charges that are ordinarily incurred for support calls may be canceled if a Technical Support Professional for Microsoft Dynamics and related products determines that a specific update will resolve your problem. The usual support costs will apply to any additional support questions and issues that do not qualify for the specific update in question.

Note This is a "FAST PUBLISH" article created directly from within the Microsoft support organization. The information contained here in is provided as-is in response to emerging issues. As a result of the speed in making it available, the materials may include typographical errors and may be revised at any time without notice. See Terms of Use for other considerations.