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.

Join Philippe Norré, Head, KPMG and Colin Matthews, Avalara for a short webinar to run through the latest VAT developments in Saudi Arabia.

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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

Saudi Arabia VAT reverse charge foreign providers

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,...

Saudi Arabia 4,700 VAT violations

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...

Four Gulf states not ready for VAT till end of 2019

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...

Saudi Arabia simplified VAT invoice

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...

Saudi Arabia removes private education from VAT

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...

VAT causes inflation?

January 6, 2018

As the first two Gulf states, Saudi Arabia and UAE, join this week the other 160-plus countries with a VAT regime, the old objection...