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Date of supply and tax due date in the specific cases under Article 20

Dariba Tax Team·

The date on which Tax becomes due determines the return in which it must be reported. Article 23(1) of the Common VAT Agreement provides that Tax becomes due on the date of the supply, the date of issuance of the tax invoice, or upon partial or full receipt of the Consideration, whichever comes first, and to the extent of the amount received. Article 23(2) sets the date of supply for ordinary cases, Article 23(3) addresses supplies of a repetitive nature, and Article 23(4) permits each Member State to determine the due date for supplies not referred to in those subsections. Article 19 of the VAT Law provides that the Implementing Regulations determine the Tax due date for supplies not provided for in the Agreement.

Article 20 of the Regulations sets out the date of supply and tax due date in specific circumstances. It was not amended by ZATCA Board Resolution No. (01-06-24).

Continuous services with periodic consideration: Article 20(1)

Where services are supplied on a continuous basis and the contract or agreement states that Consideration is payable periodically, resulting in the issuance of Invoices on a continuous basis, Article 20(1) provides that the date of supply and the tax due is the due date of each payment, the date on which a payment is actually made, or the date of issuance of an Invoice, whichever is earliest. The provision adds that this must occur at least once in any twelve consecutive month period. This reflects the approach in Article 23(3) of the Agreement for supplies of a repetitive nature.

Other continuous supplies: Article 20(2)

In all other cases where supplies of Goods or services are made on a continuous basis, Article 20(2) provides that each occurrence is deemed a separate Supply, on which the tax becomes due on the earlier of the date an Invoice is issued or payment is made for those Goods or services, to the extent of the amount invoiced or paid.

No invoice and no payment: Article 20(3)

Article 20(3) addresses continuous supplies where no payment has been received and no invoice has been issued. The supply is treated as occurring, and the tax is due, on the date falling twelve months after the later of:

This provision prevents a continuous supply from remaining outside the return indefinitely where billing and payment are deferred.

Oil, gas, water or electricity through a network: Article 20(4)

The supply of oil, gas, water or electricity through a distribution network which is not made on a continuous basis is deemed to occur, and the tax is due, on the earlier of the date the Supplier issues an Invoice for those Goods and the date the Supplier receives payment for them.

Contracts with government bodies: Article 20(5)

Where Goods or services are supplied to a government body under contracts executed in accordance with the Government Tenders and Procurement Law, Article 20(5) provides that the date of supply and tax due is the earlier of the date a payment order in respect of the Supply is issued to the customer, or the date the consideration, or part of it, is received, and to the extent of the amount received. Suppliers to government bodies should therefore monitor the issue of payment orders, not only invoices and receipts.

Nominal supply on cessation of activity: Article 20(6)

Article 20(6) provides that a Nominal Supply made as a result of the cessation of a Taxable Person’s Economic Activity takes place, and the tax is due, on the date of deregistration of that Person determined in accordance with the Law and the Regulations. This should be read with Article 15(7), as amended by Resolution No. (01-06-24), which deems a supply of goods where goods are retained after the taxable person ceases its business activity, and with Article 13, under which the effective date of deregistration is determined by the Authority.

Relationship with the general rule

Article 20 does not displace Article 23(1) of the Agreement for ordinary, one-off supplies. It applies only in the circumstances it describes. Businesses with subscription, maintenance, utility or government contracts should identify which paragraph of Article 20 governs each revenue stream, since the tax due date may fall before the contractual invoice date.

Instruments relied on: Implementing Regulations, ninth edition, 26/11/1444H corresponding to 15/6/2023G, unofficial English translation, Articles 13, 15(7) and 20 (Article 20 was not amended by the text of ZATCA Board Resolution No. (01-06-24) relied on here; Article 15(7) is cited as amended by that Resolution dated 17/05/1446H, published in the Official Gazette (Umm Al-Qura, issue 5082) on 18 April 2025, unofficial English translation); VAT Law, Article 19; Common VAT Agreement, Article 23. The Arabic text prevails.

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