Saudi Arabian VAT rates

The standard VAT rate for Saudi Arabia is 5%, with a nil VAT rate for some goods.

Saudi VAT rates

Rate Type Which goods or services
5% Standard (1st Jan 2018) All other taxable goods and services.
0% Zero Exports of goods or services outside the Council Territory backed by evidence of the movement of the goods/services; Supplies within customs duty suspension zones; Exports of services include where the customer is not resident within the a Council Territory and/or the consumption does not take place within the Territory; International transport services of goods or passengers; Medical equipment and medicines and Investment precious metals

Exempt supplies

The following supplies are VAT exempted, and therefore deemed as not eligible for reclaims of input VAT reclaims:

  • The issue or transfer of money or security for month
  • Credit
  • Operation of current, deposit and savings accounts
  • Financial instruments
  • Islamic finance products – Shari’ah compliant
  • Interesting on loans, credit or debt security
  • Life insurance
  • Residential real estate leases (excludes hotel and similar short-term rentals)

Zero-rated supplies

The following supplies are deemed zero-rated, and therefore eligible for reclaiming VAT suffered:

  • Exports of goods or services outside the Council Territory backed by evidence of the movement of the goods/services
  • Supplies within customs duty suspension zones
  • Exports of services include where the customer is not resident within the a Council Territory and/or the consumption does not take place within the Territory
  • International transport services of goods or passengers
  • Medical equipment and medicines
  • Investment precious metals

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...