Saudi Arabia VAT
Saudi Arabia implemented a Value Added Tax regime on 1 January 2018. This was based on the Gulf Co-Operation Council's VAT Treaty, which sets the broad parameters for the role out of VAT across its 6 member states.
Key components include:
Saudi Arabian VAT registrations
- Resident and non-resident businesses performing taxable supplies must register with the tax authorities within 20 days of passing the VAT registration threshold. Businesses most evaluate if they have exceeded the threshold on a monthly basis
- The registration threshold is SAR375,000
- VAT registrations may back or forward dated
- Zero-rated or ‘gift’ supplies will not count towards the VAT registration threshold; but supplies received under the reverse charge will
- Voluntary VAT registrations for businesses under the annual threshold will be permitted
- VAT registration applications are made electronically, with the following information:
- Name of business, including ID information
- Address of business, including email contact details
- Commercial registration numbers
- Date of VAT registration
- Value of annual taxable supplies
- Anti-splitting rules are included, designed to prevent avoiding the VAT registration threshold
- Non-resident tax payers may use a tax agent or register directly
- Non-residents must appoint a Tax agent, who must be approved by the tax authorities
- Tax agents are joint and severally liable for the tax payer’s VAT liabilities
- VAT Group registrations, where connected businesses apply for a single, combined registration and ID are permitted. The criteria for this includes:
- Only resident businesses
- Common control of the businesses
- As least one of the businesses must be eligible for VAT registration in their own right
- One of the businesses will be nominated as the reporting entity
- VAT deregistrations are required where the taxable supplies cease, or fall below the annual VAT registration threshold
Latest Saudi news
July 29, 2019
Saudi Arabia’s General Authority of Zakat and Tax (GAZT) has dropped the requirement for foreign VAT-registered businesses to appoint a local fiscal representative. The measure was implemented on 18 July 2019....
October 5, 2018
The Saudi Arabian tax authority has published guidance on the reverse charge rules for B2B supplies provided by non-residents. As with most VAT regimes,...
April 23, 2018
Following the 1 January 2018 launch of 5% VAT in Saudi Arabia, over 4,700 violations have been found from 12,578 audits of businesses. The...
February 15, 2018
The International Monetary Fund (IMF) has declared that the Arab Gulf states of Bahrain, Qatar, Oman and Kuwait will not be prepared for the...
January 30, 2018
The Kingdom of Saudi Arabia is relaxing the requirement to produce simplified invoices for B2C sales under the new VAT regime. Initially following the...
January 14, 2018
Saudi Arabia has reclassified privately provided education as zero-rated for VAT from standard rated. The change will match the classification of non-state supplied education...
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