Saudi Arabia VAT 2026: Rates, Thresholds & Filing

Businesses operating in Saudi Arabia continue to apply a standard value-added tax (VAT) rate of 15% on most taxable goods and services in 2026, with clear rules on registration, filing, and penalties that owners are advised to review.

Not everything is taxed at the standard rate. Zero-rated supplies are taxed at 0% and include exports of goods and services to non-residents, international transport, qualifying medicines and medical equipment, and qualifying investment metals such as gold, silver, and platinum of 99% purity or higher. Certain supplies are fully exempt, including specific financial services and residential rent.

Registration thresholds

Resident businesses must register for VAT once their taxable supplies exceed SAR 375,000 over any 12-month period, whether past or expected. Registration is required within 20 to 30 days of crossing the threshold, depending on the applicable guidance. Businesses with taxable supplies or expenses between SAR 187,500 and SAR 375,000 may register voluntarily.

Non-resident businesses making taxable supplies in the Kingdom have no registration threshold and must register from their first taxable transaction. Registration is completed electronically through the ZATCA portal, and there is no government fee. Failing to register on time after crossing the mandatory threshold can lead to an administrative fine of around SAR 10,000.

Why it matters

VAT-registered businesses charge 15% on invoices and collect it from customers, but they can also recover input VAT paid on taxable business expenses under ZATCA rules — a benefit that can make voluntary registration worthwhile for smaller businesses. VAT returns must be filed periodically through the ZATCA electronic system, typically monthly for larger taxpayers and quarterly for smaller ones. Each return reports output VAT, input VAT, and the net amount payable or refundable, and must be submitted by the statutory deadline. Late filing or payment can result in penalties and fines, so timely compliance is essential.

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