Saudi Arabia VAT Rates
Saudi Arabia's Value Added Tax (VAT), known locally as ضريبة القيمة المضافة, applies to most goods and services supplied within the Kingdom. Administered by the Zakat, Tax and Customs Authority (ZATCA), the tax was introduced on 1 January 2018 at 5% and raised to the current standard rate of 15% on 1 July 2020. Saudi Arabia's VAT framework is part of the broader GCC Unified VAT Agreement.
VAT Rates in Saudi Arabia
Rate | Type | Examples of Goods & Services |
|---|---|---|
15% | Standard | Most goods and services, hospitality, entertainment, domestic transport, telecommunications |
0% | Zero-rated | Exports of goods and services outside the GCC, international transport of goods and passengers, medicines and medical equipment, investment-grade gold (99%+ purity), first supply of qualifying residential real estate |
Exempt | Exempt | Financial services (margin-based), bare land transactions, residential property resales |
Zero-Rated Supplies
Zero-rated supplies are subject to VAT at 0%. Businesses making zero-rated supplies can still reclaim input VAT on related purchases, making this category particularly relevant for exporters and businesses operating in international travel and logistics.
Key zero-rated categories include:
Exports — goods physically exported outside the GCC territory, and services supplied to customers outside the GCC
International transport — international passenger flights, international freight, and related ancillary services
Medicines and medical equipment — qualifying pharmaceutical products and approved medical devices
Investment-grade gold and metals — gold, silver, and platinum meeting purity thresholds supplied between VAT-registered dealers
Qualifying residential real estate — the first supply of a newly constructed residential property
Exempt Supplies
Exempt supplies fall outside the scope of VAT entirely. Businesses cannot charge VAT on exempt sales, and — importantly — cannot reclaim input VAT on costs directly related to making those exempt supplies.
Key exempt categories include:
Financial services — services provided for an implicit margin, such as lending, deposit-taking, and currency exchange (explicit fee-based financial services are typically standard-rated)
Bare land — sales and leases of undeveloped land
Residential property — subsequent (non-first) supplies of residential real estate
VAT registration rules & thresholds
Threshold (SAR) | Notes | |
|---|---|---|
Mandatory registration | SAR 375,000 | Applies to taxable supplies in the previous or next 12 months |
Voluntary registration | SAR 187,500 | Allows input VAT recovery before reaching the mandatory threshold |
Non-resident suppliers | No threshold | Must register from the first taxable supply in Saudi Arabia |
Key rules to know:
Businesses must register within 30 days of exceeding the mandatory threshold. Late registration can trigger a penalty of up to SAR 10,000.
Non-resident businesses must typically appoint a local tax representative to file returns on their behalf.
VAT returns are filed monthly for businesses with annual taxable supplies above SAR 40 million, and quarterly for all others. Returns are due by the last day of the month following the tax period.
E-invoicing is mandatory under ZATCA's Fatoora system. Phase 2 (integration with ZATCA systems) continues rolling out in waves — businesses above SAR 7 million in annual revenue were required to comply from January 2025.
Businesses making exclusively zero-rated supplies are exempt from mandatory VAT registration.
Disclaimer
Please be aware that this page is informational only, and many external factors unique to your company may apply. Each company must make its own decisions about how to meet its tax obligations.
For official guidance, visit the Zakat, Tax and Customs Authority (ZATCA) website.
Last reviewed: March 2026
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