VAT in Saudi Arabia Overview
Value Added Tax (VAT) was introduced in Saudi Arabia on January 1, 2018, at 5%. It was increased to 15% on July 1, 2020. VAT applies to most goods and services, with some exemptions.
Who Must Register for VAT?
- Mandatory: Businesses with annual revenue exceeding SAR 375,000
- Voluntary: Businesses with annual revenue between SAR 187,500 - SAR 375,000
- Exempt: Businesses below SAR 187,500 annual revenue
VAT Registration Number
Your VAT registration number (TRN) is a 15-digit number issued by ZATCA. This number must appear on all tax invoices and is required for e-invoicing compliance.
VAT Calculation
VAT is calculated as 15% of the taxable amount:
VAT Amount = Taxable Amount × 15%
Total with VAT = Taxable Amount × 1.15
VAT Categories
- Standard Rate (15%): Most goods and services
- Zero Rate (0%): Exports, international transport, qualified medicines
- Exempt: Financial services, residential real estate, life insurance
VAT Returns and Filing
VAT returns must be filed through ZATCA's portal:
- Monthly: For businesses with annual revenue exceeding SAR 40 million
- Quarterly: For all other registered businesses
VAT and E-Invoicing
All VAT-registered businesses must issue e-invoices that include:
- VAT registration number
- VAT amount clearly shown
- Taxable amount breakdown
- ZATCA-compliant QR code
Manage VAT with FatooraPlus
FatooraPlus automatically calculates VAT, generates compliant invoices, and helps you track your VAT liability. All invoices include proper VAT breakdown as required by ZATCA.