Talk about business growth in the Middle East lately, and you’ll inevitably bump into the same letters - VAT. You’ve probably noticed that companies in the UAE and Saudi Arabia are fixated on getting their tax right, especially because even a small mistake on VAT can cost time, money, and trust with authorities.
QuickBooks Software is one of the popular tools small and mid-sized businesses use there, but honestly, setting up VAT properly in an accounting system isn’t always straightforward.
In both the UAE and KSA, the tax system has its own quirks, and being on top of them is now basically standard practice for any serious business owner using QuickBooks Online.
So, we’ll talk about what VAT actually is, how it works differently in the UAE and KSA, why configuring it carefully matters, and most importantly, how you can set it up in QuickBooks so your books don’t end up a mess by the time filing season hits.
What Is VAT?
VAT, or we can say Value Added Tax, is a consumption tax that is applied at each stage of the supply chain, from the moment a good or service is made to when it reaches the end customer. It's a tax on value added, not just a hidden fee at the end.
Businesses collect VAT on behalf of the government and essentially act as tax agents. They charge customers VAT, record it, report it, and then pay it to the authorities.
VAT in UAE & KSA
UAE VAT Rate
The UAE has a standard rate of 5% VAT for most goods and services. But the nation doesn’t charge VAT on some specific zero-rated supplies and exempt items. If you don’t apply these correctly, you could undercharge or overcharge customers.
KSA VAT Rate
Saudi Arabia’s VAT regime is steeper. The standard VAT rate here is 15%. KSA also has some 0% zero-rated supplies and exempt categories.
So yes, there’s a meaningful difference. UAE is relatively low at 5%, while KSA stays at 15%, and both have special cases for exports, zero-rated goods, and exemptions.
Accurate VAT Setup for UAE & KSA
Configure 5% UAE VAT and 15% Saudi VAT correctly in QuickBooks. Avoid calculation errors and ensure every invoice is tax compliant from day one.
Importance of VAT Configuration in the UAE
A proper setup for VAT registration in the UAE matters because you need to comply with certain invoice requirements and VAT documentation standards as per the Federal Tax Authority.
Accurate Calculations: You must set VAT in QuickBooks correctly. Only after that, the software can automatically calculate VAT for invoices and expense entries.
Input VAT Tracking: If you’re buying goods and services, you want to be sure you’re claiming back what you’re allowed to.
Importance of VAT Configuration in KSA
In Saudi Arabia, it's almost similar. But here, the environment is a bit stricter for some businesses due to the additional reporting and e-invoicing expectations from the Zakat, Tax, and Customs Authority (ZATCA).
Apply the correct rate: Remember, the rate of 15% VAT needs to be your baseline for standard goods or services.
Zero-rated vs exempt: Misclassifying these can cost you reclaimed VAT or overpayment.
VAT reporting: You still must reconcile VAT collected and VAT paid properly so your ZATCA returns are clean.
How to Manage VAT in QuickBooks: A Step-by-Step Setup
Go to the Taxes Section
Open your QuickBooks dashboard. Now, click Taxes and choose the VAT setup.
Enter Core VAT Details
Set your start date exactly as on your VAT registration. If you make it off, QuickBooks could apply VAT to transactions that shouldn’t be taxed yet.
Simplified VAT Reporting & Filing
Generate VAT summary reports, track input and output tax, and stay ready for filing with the Federal Tax Authority and Zakat, Tax and Customs Authority.
Choose VAT Filing Frequency
In this section, you must ensure the frequency of your VAT filing sessions. It can be manually, annually, or quarterly. Also, do not forget that the frequency needs to match what you have already registered with the Federal Tax Authority.
Select Your Accounting Method
Just like the frequency, the method also must match your FTA registration because it affects when VAT is recognized. You need to choose between the accrual and cash accounting methods.
Tax Registration Number
After these steps, carefully input yourTRN (Tax Registration Number). You must make sure that the TRN is correct.
Flat Rate Scheme
Then, select the FRS or the Flat Rate Scheme. Do it only if it’s applicable for your business.
Once this is done, complete the entire process by clicking on Next and then OK. Now QuickBooks will automatically calculate VAT on eligible sales and purchases.
So, setting up VAT in QuickBooks for both the UAE and KSA isn’t rocket science, but it’s easy to get wrong if you leave it until year-end. By giving the system the right VAT codes, correct TRNs, and matching your official tax registration details, you can save hours of reconciliation later and avoid penalties with the FTA or ZATCA.
FAQ
Is the UAE VAT and Saudi VAT the same?
No. While both United Arab Emirates and Saudi Arabia introduced VAT at 5% in 2018, Saudi Arabia later increased its VAT rate to 15% in 2020. The regulations, filing procedures, and compliance requirements also differ between the two countries.
Does QuickBooks work in the UAE?
Yes. QuickBooks works in the UAE and supports VAT-compliant invoicing, tax tracking, and reporting. Businesses can configure VAT rates and generate tax reports required for filing with the Federal Tax Authority.
How do I manage VAT rates in QuickBooks?
In QuickBooks, you can enable VAT under tax settings, create or edit VAT codes, and assign them to products or services. The system automatically calculates VAT on invoices and generates VAT summary reports for filing.
How to do VAT filing in KSA?
VAT filing in Saudi Arabia is done through the Zakat, Tax and Customs Authority portal. Businesses must calculate output VAT (sales) and input VAT (purchases), submit the VAT return online, and pay any due amount before the deadline.
Can QuickBooks handle VAT compliance in KSA?
Yes. QuickBooks can calculate 15% Saudi VAT, apply tax codes to transactions, and generate reports needed for VAT filing. However, businesses must ensure correct setup according to KSA tax regulations and reporting standards.
Expert Implementation & Training
Get professional QuickBooks VAT configuration, staff training, and ongoing compliance support tailored for UAE and KSA businesses.
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