VAT Registration & Compliance
Written in plain language for general understanding. This is educational content, not legal advice. Based on Saudi royal decrees, regulations, and ministerial decisions.
Saudi National Law
What is this right?
Saudi Arabia charges Value Added Tax (VAT) at 15% on most goods and services:
- Mandatory registration: Businesses with annual taxable supplies exceeding SAR 375,000 must register for VAT.
- Voluntary registration: Businesses with supplies between SAR 187,500 and SAR 375,000 can register voluntarily.
- Exempt supplies: Certain items are exempt or zero-rated, including some financial services, residential property rentals, and exports.
- Filing: VAT returns are typically filed monthly (for businesses with annual supplies over SAR 40 million) or quarterly.
- E-invoicing (Fatoora): Businesses must use ZATCA-compliant electronic invoicing for all taxable transactions.
When does it apply?
- Your business has annual taxable supplies above the registration threshold.
- You sell goods or services in Saudi Arabia.
- You import goods into Saudi Arabia.
What should you do?
- Register on the ZATCA portal if your taxable supplies exceed the threshold.
- Issue compliant tax invoices with all required fields (VAT number, amount, rate, etc.).
- File VAT returns and pay any VAT due by the last day of the month following the tax period.
- Implement the Fatoora e-invoicing system as required by ZATCA.
What should you NOT do?
- Do not charge VAT without registration — collecting VAT without a valid registration number is illegal.
- Do not file late — penalties start at 5% of unpaid VAT and increase with time.
- Do not ignore e-invoicing requirements — non-compliance can result in fines starting at SAR 5,000.
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