Saudi Arabia VAT on digital and e-services

Saudi Arabia introduced Value Added Tax on 1 January 2018, including levying the consumption tax of foreign providers of the electronic of digital services.

Non-resident providers are only responsible for VAT on sales of e-services to consumers. B2B transactions, imports of e-services, may be use the reverse charge with the customer taking responsibility for the VAT reporting.

E-services subject to Saudi VAT

The following digital or electronic services, provided over the internet or similar, are subject to VAT:

  • Download or streaming media – video or music
  • E-books
  • Online or cloud software or storage
  • Online advertising and related marketing
  • Web services and hosting

VAT registration threshold

There is no VAT registration threshold for non-resident provider of e-services. They must register immediately with the General Authority of Zakat and Tax. Foreign providers must appoint a fiscal representative for reporting VAT returns. There is no simplified VAT registration scheme for electronic services providers.

Resident companies no longer have to appoint fiscal representatives in Saudi Arabia.

Marketplaces and intermediaries

If a marketplace or similar electronic interface or intermediary contracts and assists in collections, it will likely take responsibility for the VAT collections.

Saudi Arabia VAT news