Article 34 of the Saudi Value Added Tax Law

This article addresses the taxable person, that is, the enterprise or registered person that collects output tax on its sales and deducts the tax it paid on its purchases.

In some tax periods the deductible tax may exceed the tax due, producing what the article calls the "net deductible or refundable tax". The article provides that the taxable person may be allowed one of two things:

• to apply to recover this amount.
• to carry it forward to future tax periods so that it can be used later.

However, the article does not itself say when recovery is chosen and when carrying forward applies, nor the periods or procedures; it refers the conditions and controls for all of this to the Implementing Regulations. Recovery should therefore not be assumed to be automatic or within a particular period without referring to the Regulations.

This article differs from Article 33, which deals with recovery by non-residents of the GCC states and tourists, as it concerns the taxable person itself and its balance in its tax periods.

It is useful for an enterprise to keep its records and invoices accurately, since it relies on them to prove its balance. If an enterprise faces a dispute with the Authority over its balance or its application for recovery, it is advisable to consult a lawyer specializing in tax and commercial matters.