VAT in Saudi Arabia
The standard rate of VAT in Saudi Arabia is 15%, in force since 1 July 2020 (it was 5% from the tax's introduction on 1 January 2018). Registration with ZATCA is mandatory once taxable supplies exceed SAR 375,000 in a twelve-month period and voluntary from SAR 187,500. Non-residents making taxable supplies in the Kingdom must register regardless of the threshold.
Key facts
| Standard rate | 15% (since 1 July 2020) |
|---|---|
| Mandatory registration | Taxable supplies above SAR 375,000 in 12 months |
| Voluntary registration | Taxable supplies or expenses above SAR 187,500 |
| Return period | Monthly if annual taxable supplies exceed SAR 40 million, otherwise quarterly |
| Filing and payment deadline | Last day of the month following the end of the period |
| Authority | Zakat, Tax and Customs Authority (ZATCA) |
Opens the assistant with Saudi Arabia already selected. Answers cite the law, guidance and cases they rest on.
How VAT returns are filed
Returns are filed electronically through the ZATCA portal. A registrant whose annual taxable supplies exceed SAR 40 million files monthly; everyone else files quarterly. The return and any payment are due by the last day of the month following the end of the tax period, and late filing and late payment each carry their own penalty.
Since December 2021 tax invoices must be issued electronically under the FATOORA e-invoicing programme, with integration to ZATCA's platform rolled out in waves by turnover from January 2023.
Zero-rated and exempt supplies
Exports of goods and services, international transport and qualifying medicines, medical equipment and investment metals are zero-rated: no VAT is charged, but input tax remains recoverable. Specified financial services and residential rental are exempt, so no VAT is charged and related input tax is not recoverable.
Claiming input tax
Input tax is deductible when the goods or services are used for taxable supplies and the claim is supported by a valid tax invoice. Deduction is blocked for certain categories, including entertainment and vehicles available for private use and, since 18 April 2025, event attendance, hospitality, non-mandatory employee healthcare and insurance and fuel for restricted vehicles, and must be apportioned where costs serve both taxable and exempt activity.
The VAT Implementing Regulations were amended with effect from 18 April 2025. Ask the assistant for the position on a specific date if a transaction straddles that change.
Frequently asked questions
- What is the VAT rate in Saudi Arabia?
- 15%. The rate rose from 5% to 15% on 1 July 2020.
- When must a business register for VAT in Saudi Arabia?
- When taxable supplies exceed SAR 375,000 over the past twelve months or are expected to in the next twelve. Voluntary registration is available from SAR 187,500.
- Are VAT returns monthly or quarterly?
- Monthly where annual taxable supplies exceed SAR 40 million, otherwise quarterly, due by the last day of the following month.
Primary sources
- ZATCA — VAT rules and regulations
- ZATCA — E-invoicing (FATOORA)
- Zakat, Tax and Customs Authority (ZATCA)
Related guides
Disclaimer: This page provides general tax information based on publicly available primary sources, reviewed on the date shown. Rules are conditional and change; the page may not reflect a change made after that date, and it is not a substitute for advice from a qualified tax professional on your specific situation.