Article 21 of the Saudi Value Added Tax Law

This article deals with a transitional stage: transactions that began before the date the Law took effect or before a person's registration date and were completed after it.

First: advance invoice or payment (paragraph 1)

If an invoice is issued, or consideration for the goods or services is paid, before the date the Law takes effect or before the registration date, and the supply takes place after that date, the date the tax falls due is the date of supply. That is, issuing the invoice or paying early does not put the supply outside the tax as long as the supply itself took place after that date.

Second: supplies between member states (paragraph 2)

The preceding rule also applies to supplies made between a taxable supplier resident in the Kingdom and a customer in another member state, or the reverse.

Third: continuous supplies (paragraph 3)

If a supply is continuous, and part of it was performed before the effective date or registration and part after, the tax does not fall due on the part performed before that date.

Relation to other articles: it is linked to Article 20, which refers to the Regulations the periods for calculating the tax and their conditions and controls, and to Article 22, which refers to the Regulations the period that entitles a taxable person to deduct input tax on services received before the registration date.

For long-running or prepaid contracts that fall on this time boundary, it is advisable to determine precisely what was performed before the date and what after, and to consult a lawyer specializing in tax or commercial matters if needed.