VAT in Saudi Arabia: Rates, Invoices, Zero-Rating and Input Tax
The short answer
Saudi VAT is charged at 15% on supplies and imports unless the zero rate or an exemption applies. Businesses register above SAR 375,000 of taxable supplies, issue Arabic tax invoices on time, charge VAT based on the place of supply, recover input VAT with proper evidence, and file returns monthly or quarterly.
Key facts
Standard rate 15%; it replaced 5% for supplies on or after 1 July 2020.
Source:VAT Law Art. 2 as amended by Royal Order A/638 (BOE consolidated text) [T02-0155]Full tax invoice due by the 15th of the following month; simplified invoice at the time of supply or payment.
Source:VAT IR Art. 53(1)(b)-(c), 53(7)(b)-(d) (Arabic 10th ed.) [T02-0052]Exports are zero-rated only with proof the goods left the GCC within 90 days.
Source:VAT IR Art. 32(1)-(2), printed p.23 [T02-0080]Residential leases, most financial services and life insurance are exempt.
Source:VAT IR Art. 30(1)(b),(2)-(4), printed pp.22-23 [T02-0092]VAT IR Art. 29(1)-(6), printed pp.21-22 [T02-0090]VAT IR Art. 29(7)-(8), printed p.22 [T02-0091]VAT is due at the earliest of supply, invoice or payment.
Source:GCC Agreement Art. 23(1) [T02-0095]
Tax invoices
A full tax invoice is needed for supplies to taxable persons or legal entities, advance payments for them, intra-GCC supplies, exports of goods and zero-rated services to customers outside the GCC.
Source:VAT IR Art. 53(1)(a)-(b), printed p.49 [T02-0100]It must be in Arabic and show the issue date, sequential number, both parties’ details, the supplier’s VAT number, the goods or services, taxable amount, rate and VAT in SAR.
Source:VAT IR Art. 53(5), printed p.50 [T02-0101]Simplified invoices are for B2C supplies, issued at the date of supply or payment; only licensed banks, financial institutions and insurers may use the 15-day option and monthly summaries.
Source:VAT IR Art. 53(7)(a)-(d), printed pp.50-51 [T02-0102]VAT IR Art. 53(8), printed p.51 [T02-0103]Cancellations, price changes, discounts and returns after invoicing need a credit or debit note referencing the original invoice, by the 15th of the following month.
Source:VAT IR Art. 54(1),(2),(4),(5),(6), printed pp.52-53 [T02-0107]
Place of supply and zero-rating
Goods without transport are supplied where they are put at the customer’s disposal; goods with transport, where transport starts.
Source:GCC Agreement Art. 10 [T02-0070]GCC Agreement Art. 11 [T02-0071]Services are generally supplied where the supplier resides; business-to-business services, where the customer resides. Special rules apply to transport, real estate, telecom and electronic services, and events.
Source:GCC Agreement Art. 15 and 16 [T02-0072]GCC Agreement Art. 17-21 [T02-0073]Services to a customer resident outside the GCC are zero-rated, except where a special place-of-supply rule applies, the customer or a related person benefits in a member state, or the services are performed on goods in a member state.
Source:VAT IR Art. 33(1)-(2), printed p.25-26 [T02-0083]International transport of goods or passengers to or from the Kingdom is zero-rated, as are qualifying medicines and medical goods and investment metals.
Source:VAT IR Art. 34(1)-(3),(7), printed pp.26-27 [T02-0085]VAT IR Art. 35 [T02-0041]VAT IR Art. 36, 36 bis, 36 bis(2), printed pp.28-29 [T02-0088]Until the GCC electronic services system links the Kingdom with another member state, that state is treated as outside the GCC.
Source:VAT IR Art. 79(6)-(7), printed p.75 [T02-0078]
Exemptions
Financial services are exempt unless the charge is an explicit fee, commission or discount; Islamic equivalents get the same treatment.
Source:VAT IR Art. 29(1)-(6), printed pp.21-22 [T02-0090]Life insurance and reinsurance are exempt.
Source:VAT IR Art. 29(7)-(8), printed p.22 [T02-0091]Residential leases are exempt; hotels, serviced apartments and similar short-stay accommodation are taxable.
Source:VAT IR Art. 30(1)(b),(2)-(4), printed pp.22-23 [T02-0092]
Imports
Import VAT is a separate event from any later supply, charged on the customs value plus duties and other charges, and paid at clearance.
Source:VAT Law Art. 2 [T02-0032]Unified GCC VAT Agreement Art. 28(1) [T02-0033]Imports/Exports Guideline s.4.3 and s.5.1 [T02-0034]Imports of zero-rated medicines, medical equipment and investment metals are exempt from import VAT, as are listed diplomatic, personal and returned goods.
Source:GCC Agreement Art. 38(1) [T02-0039]Imports/Exports Guideline s.5.1(2) and (3) [T02-0040]Only the importer, holding the customs documents, can deduct import VAT.
Source:Imports/Exports Guideline s.10.3 [T02-0036]
Frequently asked questions
When is VAT due on a supply?
At the earliest of the date of supply, the date of the tax invoice, or receipt of all or part of the payment (to the extent received).
How is VAT timed on continuous services with periodic payments?
VAT is due on the earlier of the payment due date, actual payment or invoice, and at least once every 12 months.
When are exported goods zero-rated?
When the supplier holds proof within 90 days of the supply that the goods left the GCC. Without proof after 90 days the supply is treated as domestic at 15% until proof is obtained.
Can a Saudi company zero-rate commission it charges a foreign principal?
In most cases yes, where the principal has no residence in the Kingdom or the GCC. The standard rate applies where the service involves physical handling of goods in the Kingdom or a GCC-use exception applies.
Is a customs-clearance fee zero-rated?
Only when it is ancillary to and supplied with zero-rated international transport, or supplied for a qualifying means of transport at a port or airport. A clearance fee billed alone does not meet that condition.
Are bank charges subject to VAT?
Financial services are exempt unless the consideration is an explicit fee, commission or commercial discount, which is then taxed at 15%. Interest or margin-based charges on lending, finance leases and murabaha are exempt.
What is a VAT group?
Supplies between members of the same VAT group are outside the scope of VAT, and each member’s activity, supplies, imports and taxes are treated as the group’s.
How do we correct an invoice that was already issued?
Issue a credit note (if the VAT shown was too high) or a debit note (if too low), referencing the original invoice, by the 15th day of the month after the event.
What must a simplified tax invoice show?
Issue date; supplier name, address and VAT number; a description of the goods or services; the consideration; and the VAT due or a statement that the price includes VAT.
Are medicines subject to VAT?
Domestic supplies of qualifying medicines and qualifying medical goods are zero-rated, following classifications issued by the Ministry of Health or another competent authority.
How do imported services work for VAT?
A Saudi taxable person that receives services from a supplier outside the GCC accounts for VAT under the reverse charge — output and, if entitled, input VAT in the same return.
General information only, not tax or legal advice. Laws change; check the official Arabic text or speak to a qualified adviser before acting.
Rules cited on this page
Each statement above names the library row it comes from. The law and article, the date the row was last verified against the official source, and a link to the official text where one is held are listed here.
| Row | Law / article | Verified on | Official text |
|---|---|---|---|
| T02-0002 | VAT IR Art. 3(1) and Art. 4(1); Imports/Exports Guideline s.3.2 | 2026-10-04 | — |
| T02-0019 | VAT IR Art. 58; Art. 59(1); Art. 62(1) | 2026-10-04 | — |
| T02-0032 | VAT Law Art. 2; IR Art. 14; Imports/Exports Guideline s.4.1 | 2026-10-04 | — |
| T02-0033 | Unified GCC VAT Agreement Art. 28(1); Imports/Exports Guideline s.4.4 | 2026-10-04 | — |
| T02-0034 | Imports/Exports Guideline s.4.3 and s.5.1 | 2026-10-04 | — |
| T02-0036 | Imports/Exports Guideline s.10.3; GCC Agreement Art. 48 | 2026-10-04 | — |
| T02-0039 | GCC Agreement Art. 38(1); Imports/Exports Guideline s.5.1; IR Art. 35 and 36 | 2026-10-04 | — |
| T02-0040 | Imports/Exports Guideline s.5.1(2) and (3) | 2026-10-04 | — |
| T02-0041 | VAT IR Art. 35 | 2026-10-04 | — |
| T02-0052 | VAT IR Art. 53(1)(b)-(c), 53(7)(b)-(d) (Arabic 10th ed.); Imports/Exports Guideline s.11.1 | 2026-10-04 | — |
| T02-0070 | GCC Agreement Art. 10; IR Art. 26(1)-(2), printed p.20 | 2026-10-04 | — |
| T02-0071 | GCC Agreement Art. 11; IR Art. 27(1)-(3), printed p.20 | 2026-10-04 | — |
| T02-0072 | GCC Agreement Art. 15 and 16 | 2026-10-04 | — |
| T02-0073 | GCC Agreement Art. 17-21; IR Art. 22, 23, 24, 25(1), printed pp.17-19 | 2026-10-04 | — |
| T02-0078 | VAT IR Art. 79(6)-(7), printed p.75 | 2026-10-04 | — |
| T02-0080 | VAT IR Art. 32(1)-(2), printed p.23; GCC Agreement Art. 34(1)(a) | 2026-10-04 | — |
| T02-0083 | VAT IR Art. 33(1)-(2), printed p.25-26; GCC Agreement Art. 34(1)(d) | 2026-10-04 | — |
| T02-0085 | VAT IR Art. 34(1)-(3),(7), printed pp.26-27; GCC Agreement Art. 32 | 2026-10-04 | — |
| T02-0088 | VAT IR Art. 36, 36 bis, 36 bis(2), printed pp.28-29; GCC Agreement Art. 35 | 2026-10-04 | — |
| T02-0090 | VAT IR Art. 29(1)-(6), printed pp.21-22; GCC Agreement Art. 36 | 2026-10-04 | — |
| T02-0091 | VAT IR Art. 29(7)-(8), printed p.22 | 2026-10-04 | — |
| T02-0092 | VAT IR Art. 30(1)(b),(2)-(4), printed pp.22-23 | 2026-10-04 | — |
| T02-0095 | GCC Agreement Art. 23(1) | 2026-10-04 | — |
| T02-0097 | VAT IR Art. 20(1)-(3), printed pp.15-16 | 2026-10-04 | — |
| T02-0100 | VAT IR Art. 53(1)(a)-(b), printed p.49 | 2026-10-04 | — |
| T02-0101 | VAT IR Art. 53(5), printed p.50; Art. 66(2) | 2026-10-04 | — |
| T02-0102 | VAT IR Art. 53(7)(a)-(d), printed pp.50-51 | 2026-10-04 | — |
| T02-0103 | VAT IR Art. 53(8), printed p.51 | 2026-10-04 | — |
| T02-0107 | VAT IR Art. 54(1),(2),(4),(5),(6), printed pp.52-53; Amendments Guideline s.2.11 | 2026-10-04 | — |
| T02-0111 | VAT IR Art. 49(1), printed p.42; GCC Agreement Art. 44 | 2026-10-04 | — |
| T02-0126 | VAT IR Art. 18(2), printed p.15; Art. 11(7), printed p.7 | 2026-10-04 | — |
| T02-0138 | GCC Agreement Art. 9(2), 41(1); IR Art. 47(1), printed p.38; Art. 62(2)(d), printed p.57 | 2026-10-04 | — |
| T02-0155 | VAT Law Art. 2 as amended by Royal Order A/638 (BOE consolidated text); IR Art. 79(10), printed pp.76-77 | 2026-10-04 | — |
| T02-0904 | VAT IR Art. 34(5)(a)-(b) (EN 2021 ed. printed p.24); Art. 25(2) | 2026-10-05 | — |
| T02-0905 | VAT IR Art. 33; Imports/Exports Guideline (EN, May 2026) s.8.2 Example (16) p.46, s.8.3 table p.48; services-used-in-GCC tests s.8.2 (see T02-0838) | 2026-10-05 | — |
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