Business Taxes in Saudi Arabia: VAT, Zakat, CIT

Businesses operating in Saudi Arabia manage their main tax obligations — value added tax (VAT), Zakat, corporate income tax and withholding tax — through the Zakat, Tax and Customs Authority (ZATCA) and its e-portal and mobile app. Returns are filed electronically, and payments are usually settled via SADAD, Mada, or online banking after an electronic invoice is issued.

The standard VAT rate is 15% on most goods, services and imports. Exports and certain categories, such as qualifying international transport, health and education supplies, may be zero-rated (0%) when conditions are met. Some supplies — including certain financial services and real estate transactions — are exempt, subject to detailed rules.

Who must register for VAT

VAT registration is mandatory for businesses whose annual taxable supplies exceed SAR 375,000. Registration is voluntary for those with taxable supplies between SAR 187,500 and SAR 375,000, which allows input VAT recovery. Businesses below SAR 187,500 generally do not need to register. Non-resident businesses making taxable supplies in the Kingdom are usually required to register regardless of the threshold.

Filing frequency depends on turnover. Larger taxpayers above the turnover threshold file monthly VAT returns, while smaller businesses generally file on quarterly or annual cycles. The basic process involves registering as a taxable person, charging VAT and issuing tax invoices, keeping proper records, filing the return through ZATCA e-services, then paying through the SADAD invoice generated by the system.

It is worth noting that other government platforms — including Absher, Muqeem, Qiwa, Najiz, Nafath and Tawakkalna — are not used for filing or paying VAT, Zakat or corporate income tax. Those services cover immigration, labor, justice, identity and health matters, while core tax compliance remains with ZATCA. For business owners and expat entrepreneurs, understanding these rates and thresholds helps ensure timely, accurate filing and avoids penalties.

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