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SOCPA VAT Specialist Certificate Exam: free practice test

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Practice test questions with answers and explanations

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01A manufacturing company bought a machine on 1 June 2025. Its cost, including the costs of preparing it for use, was SAR 120,000, its estimated useful life is 10 years with no residual value, and it was put into use on the purchase date. The company uses the straight-line method and its financial year ends on 31 December. What is the depreciation expense for the year ended 31 December 2025?

Past exam question Unit: Principles of Financial Accounting

  1. ASAR 12,000

    This is a full year's charge (120,000 ÷ 10), but the machine was in use in 2025 only from June to December, so only part of the year is charged.

  2. BSAR 6,000

    This counts only six months (from July), although depreciation starts in June because the machine was available for use on 1 June.

  3. CSAR 5,000

    This counts only five months, leaving two months out of the actual period of use from June to December.

  4. DSAR 7,000 ✓ Correct answer

    Correct: the annual charge is 120,000 ÷ 10 = SAR 12,000 and the machine was in use for 7 months (June–December), so the expense is 12,000 × 7 ÷ 12 = SAR 7,000.

Reference: IAS 16 Property, Plant and Equipment, paragraphs 50, 55 and 62

02What is meant by neutrality in international transactions under VAT systems?

Past exam question Unit: The Theoretical and Practical Framework of VAT

  1. AExports are zero-rated and imports are zero-rated

    Relieving imports from tax would make foreign goods cheaper than taxed domestic goods, breaking neutrality instead of achieving it.

  2. BExports are taxed at the standard rate and imports are zero-rated

    This reverses the principle: it burdens exports with tax that may be charged again in the country of consumption and frees imports from domestic tax.

  3. CExports and imports are both taxed at the standard rate

    Taxing exports at the standard rate causes double taxation with the importing country and weakens export competitiveness.

  4. DExports are zero-rated and imports are taxed at the standard rate ✓ Correct answer

    Correct: exports leave free of tax so they are taxed in the country of consumption, and imports bear the same rate as domestic goods, so goods compete on equal terms (destination principle).

Reference: GCC Common VAT Agreement (2016), Articles 2 and 34

03A VAT-registered home-appliance company sold a washing machine to a customer for SAR 6,210 inclusive of VAT at the standard rate of 15%. What is the value of the washing machine excluding VAT?

Past exam question Unit: VAT Policies and Scope of Application

  1. ASAR 5,278.50

    This deducts 15% of the inclusive price (6,210 × 85%), which is wrong because VAT is charged on the VAT-exclusive value; the inclusive price must be divided by 1.15.

  2. BSAR 5,400 ✓ Correct answer

    Correct: the VAT-exclusive value is 6,210 × 100/115 = SAR 5,400, and the VAT contained in the price is 6,210 × 15/115 = SAR 810.

  3. CSAR 810

    This is the VAT element contained in the price (6,210 × 15/115), not the value of the machine before VAT.

  4. DSAR 7,141.50

    This adds 15% to a price that already includes VAT, so the tax is counted twice.

Reference: VAT Implementing Regulations (ZATCA, 10th ed., 2025), Article 45, paragraph 2

04During 2025 a company incurred overheads of SAR 100,000 plus VAT of SAR 15,000, relating to both its taxable and exempt activities. Its 2024 supplies were: taxable SAR 6,000,000 and exempt SAR 4,000,000, and it applied the resulting recovery rate during 2025. At the end of 2025 its actual supplies for the year were: taxable SAR 8,000,000 and exempt SAR 2,000,000. What adjustment to input VAT is made in the final 2025 return?

Past exam question Unit: VAT Policies and Scope of Application

  1. AA decrease in deductible input VAT of SAR 3,000

    The actual rate (80%) is higher than the rate applied (60%), so the adjustment is in the company's favour, not a reduction.

  2. BAn increase in deductible input VAT of SAR 12,000

    SAR 12,000 is the total deductible VAT at the actual rate, not the adjustment; the SAR 9,000 already deducted must be subtracted.

  3. CAn increase in deductible input VAT of SAR 20,000

    This applies the 20% difference to the expense value instead of the VAT; the adjustment concerns the input VAT only.

  4. DAn increase in deductible input VAT of SAR 3,000 ✓ Correct answer

    Correct: 60% × 15,000 = SAR 9,000 was deducted during the year; on actual figures it should be 80% × 15,000 = SAR 12,000, so the deduction is increased by SAR 3,000.

Reference: VAT Implementing Regulations (ZATCA, 10th ed., 2025), Article 51, paragraph 7; ZATCA, Guideline on Input Tax Deduction (3rd ed., May 2026), section 12.4, p. 45

05A VAT-registered person who files quarterly and uses cash-basis accounting bought equipment on credit on 1 May 2025 for use in taxable supplies. The VAT on the equipment was SAR 3,000, and the person paid for the equipment and the VAT on 5 July 2025. How much input VAT on this equipment may be deducted in the return for 1 April to 30 June 2025?

Past exam question Unit: Accounting and Tax Treatment of VAT and Its Requirements

  1. ASAR 0 ✓ Correct answer

    Correct: on the cash basis the return includes input VAT only to the extent paid; payment was made on 5 July, so the SAR 3,000 is deducted in the third-quarter return.

  2. BSAR 3,000

    Deducting the full VAT in the purchase period is the invoice-basis rule; on the cash basis input VAT is included only to the extent paid.

  3. CSAR 1,500

    Input VAT is not spread over two periods; deduction follows payment, and nothing was paid in this period.

  4. DSAR 450

    This figure applies 15% to the tax amount itself, a calculation error; and nothing was paid in the period anyway.

Reference: VAT Implementing Regulations (ZATCA, 10th ed., 2025), Article 46, paragraph 3

06Al-Asala Company files monthly VAT returns. Its return for March 2020 showed tax of SAR 100,000; the accountant later found the correct amount was SAR 80,000. Until when may the company correct this error?

Past exam question Unit: Accounting and Tax Treatment of VAT and Its Requirements

  1. AUntil 31 March 2025

    The period is not counted from the end of the tax period itself but from the end of the calendar year in which it falls.

  2. BUntil 30 April 2025

    The filing deadline is not the starting point; the period runs from the end of calendar year 2020.

  3. CUntil 31 December 2040

    The 20-year period concerns ZATCA's assessment power in evasion or non-registration cases, not a taxpayer's correction of overpaid tax.

  4. DUntil 31 December 2025 ✓ Correct answer

    Correct: an overstatement cannot be corrected more than five years after the end of the calendar year containing the period; end of 2020 + 5 years = 31 December 2025.

Reference: VAT Implementing Regulations (ZATCA, 10th ed., 2025), Article 63, paragraph 4

07The VAT actually due from a company for a tax period was SAR 150,000, but it mistakenly declared only SAR 100,000 in its VAT return. Applying the rate stated in the VAT Law for submitting an incorrect return, with no reduction or exemption, what is the fine?

Past exam question Unit: Rights, Obligations, Penalties and VAT Administration

  1. ASAR 50,000

    Incorrect: SAR 50,000 is the difference itself, which is tax to be paid, not the fine.

  2. BSAR 2,500

    Incorrect: this is 5% of the difference, the monthly late payment rate, not the incorrect return fine.

  3. CSAR 75,000

    Incorrect: this is 50% of the full tax due; the Law applies the fine to the difference only.

  4. DSAR 25,000 ✓ Correct answer

    Correct: the difference between the tax due and the tax calculated is 150,000 − 100,000 = SAR 50,000, and the Law's fine is 50% of it, i.e. SAR 25,000 (ZATCA's published penalty rules may adjust the rate applied in practice, but the question asks for the Law's rate).

Reference: Saudi VAT Law (Royal Decree No. M/113, 1438 AH), Article 42, paragraph 1; ZATCA, Guideline on Audit, Assessment, Correction and Objection to ZATCA Decisions relating to VAT (3rd ed., May 2026), section 10, pp. 52–53

08Which of the following is NOT a telecommunications or electronic service for VAT purposes?

Past exam question Unit: In-Depth Look at Key Sectors Under VAT

  1. ASupplying e-books that the customer downloads online

    E-books supplied automatically over the internet are expressly listed among these services, unlike e-books delivered on a physical medium, which are goods.

  2. BLegal advice that a lawyer sends to a client by email ✓ Correct answer

    Correct: the advice is a professional service and email is merely the delivery channel, so it is not a telecom or electronic service; it is taxed at the standard rate as an other service.

  3. CCloud computing services provided to the customer online

    Cloud computing is the provision of services over a network or the internet, and the guideline expressly treats it as an electronic service.

  4. DLive online streaming of a sports match to subscribers

    Live broadcasting and transmission over the internet is one of the items listed among these services.

Reference: VAT Implementing Regulations (ZATCA, 10th ed., 2025), Article 24, paragraph 1; ZATCA, VAT Guideline for the Telecommunications Sector (2nd ed., May 2026), section 4.2, p. 16

09An insurance company registered for VAT writes both general and life insurance. Its supplies for a tax period were SAR 40,000 (excluding VAT): SAR 24,000 of general insurance premiums and SAR 16,000 of life insurance premiums. Its standard-rated purchases were SAR 10,000 (excluding VAT), all overheads that cannot be attributed to a particular type of supply. Exempt supplies made up 40% of its total supplies in the previous calendar year. What is the result of its VAT return for the period?

Past exam question Unit: In-Depth Look at Key Sectors Under VAT

  1. AVAT payable of SAR 2,100

    Wrong: it deducts the full input VAT (1,500) although the overheads serve both taxable and exempt supplies; only 60% is recoverable under the proportional deduction.

  2. BVAT payable of SAR 2,700 ✓ Correct answer

    Correct: output VAT on general insurance is 24,000 × 15% = 3,600, and input VAT of 1,500 is recoverable at 60% (100% − 40%) = 900, so VAT payable is 3,600 − 900 = SAR 2,700.

  3. CVAT payable of SAR 4,500

    Wrong: it charges VAT on the life premiums too (40,000 × 15% = 6,000) and deducts input VAT in full, whereas life insurance is an exempt supply.

  4. DVAT payable of SAR 5,100

    Wrong: it applies the proportional deduction correctly (900) but charges VAT on all premiums (6,000), although life premiums are exempt.

Reference: VAT Implementing Regulations (ZATCA, 10th ed., 2025), Article 29, paragraph 7, and Article 51, paragraphs 3 and 4; ZATCA, VAT Guideline for Insurance and Reinsurance Activities (3rd ed., May 2026), section 7.1, p. 23

10Which of the following real estate disposals is NOT subject to RETT?

Past exam question Unit: Real Estate Transaction Tax (RETT)

  1. AA citizen's sale of a residential villa he owns to an individual buyer at market value

    Wrong: a sale of residential property between individuals transfers ownership and is taxable at 5%.

  2. BA gift of property for no consideration to a business partner who is not related to the donor

    Wrong: a gift is exempt only if notarized to a spouse or relatives up to the third degree, and a business partner is not one of them.

  3. CA public entity's sale of a resort villa under an investment programme competing with the private sector

    Wrong: a disposal by a public entity is exempt only when made as a public authority, not on commercial criteria and without competing with the private sector.

  4. DA sale of property to a ministry for use in its activities ✓ Correct answer

    Correct: a disposal to a public entity or public legal person is exempt, whatever the purpose for which the property is bought.

Reference: Real Estate Transaction Tax Law (Royal Decree No. M/84, 1446 AH), Article 3, paragraph (a), items 4 and 5; ZATCA, Detailed Guide on Real Estate Transaction Tax (6th ed., May 2026), sections 5.1.4 and 5.1.5, pp. 25-27

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See also: Accounting & Tax Exams