Saudi Arabia introduced value-added tax (VAT) on 1 January 2018, in line with the GCC agreement to implement VAT across the region and as part of the efforts to diversify non-oil revenues. Initially set at 5 percent, the rate increased to 15 percent in July 2020.
VAT applies to most goods and services, with some supplies zero-rated or exempt. It’s levied at each stage of the supply chain, with the final cost borne by the end consumer. Businesses must register with ZATCA, issue compliant e-invoices, and file monthly or quarterly returns based on annual turnover. VAT is governed by a dedicated law and regulations that outline taxpayer rights and obligations.
VAT management requires navigating a range of regulatory requirements, from input tax apportionment and sector-specific exemptions to filing obligations and e-invoicing updates. Professional support helps ensure accurate tax treatment, mitigates compliance risk, and enhances input VAT recovery.
