Business Taxes in Saudi Arabia: VAT, Zakat, CIT

Businesses operating in Saudi Arabia are subject to three main tax obligations: value-added tax (VAT), Zakat, and corporate income tax. Understanding the rates, registration thresholds, and filing deadlines helps owners stay compliant and avoid penalties.

Value-added tax (VAT)

The standard VAT rate is 15% on taxable goods and services, though some supplies are zero-rated or exempt. Registration is mandatory for businesses with annual taxable supplies of SAR 375,000 or more, and voluntary for those above SAR 187,500 but below that threshold. Registration is free. Businesses first register with the Ministry of Commerce, then log in to the ZATCA portal, select VAT Registration, complete the application, and receive the certificate by electronic notification.

Businesses with annual taxable supplies above SAR 40 million generally file monthly returns, while those at or below SAR 40 million file quarterly. Returns are submitted through the ZATCA portal or app, which generates a SADAD invoice payable via online banking or ATM. As an example, the Q1 2026 return for businesses at or below SAR 40 million was due by 30 April 2026.

Zakat

Zakat is charged at 2.5% of the zakat base for a Hijri financial year, with a minimum of SAR 500 for the specified category of payer. Entities must register with ZATCA before the end of their first financial year. Accounting-book zakat payers submit the return and pay within 120 days after the end of the zakat year; if the deadline falls on an official holiday, it extends to the next working day.

Corporate income tax

Corporate income tax is 20% on the share attributable to non-Saudi partners in a resident company, and on non-residents operating through a Saudi permanent establishment or branch. For oil and hydrocarbon companies, rates generally range from 50% to 85%. Registration is free through the Ministry of Commerce and the ZATCA portal, and returns are submitted electronically. For inquiries, ZATCA can be reached on 19993.

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