Saudi Business Taxes: VAT, Zakat & Income Tax Guide

Businesses operating in Saudi Arabia are subject to several taxes — value added tax (VAT), Zakat, corporate income tax and withholding tax — all administered by the Zakat, Tax and Customs Authority (ZATCA). Registration, filing, payment and certificates are handled entirely through ZATCA's online e-services portal, and not through other government apps.

The standard VAT rate in 2026 remains 15% on most taxable goods and services, unchanged since it rose from 5% on 1 July 2020. VAT applies to taxable supplies made in the Kingdom by registered businesses, including both resident and non-resident suppliers of goods and services.

Registration thresholds

A business must register for VAT once its taxable supplies reach SAR 375,000 over a 12-month period. Voluntary registration is available from SAR 187,500. There is no government fee for submitting a VAT registration application, and non-resident businesses providing taxable supplies must register regardless of turnover.

To register, an establishment typically needs a commercial registration (CR), financial records supporting its taxable supplies and its IBAN. After logging in to the ZATCA portal and completing the VAT Registration form with business, CR, turnover and bank details, applicants receive a certificate electronically by SMS or email showing their 15-digit Tax Registration Number (TRN) and effective date.

Invoicing and compliance

From the effective date, the business must charge 15% VAT on taxable supplies, issue compliant e-invoices and keep records for at least six years. VAT invoices must be issued in Arabic and display the total price including VAT.

Electronic invoicing (Fatoora) is mandatory, and billing systems must be technically integrated with ZATCA's e-invoicing system For residents and business owners alike, understanding these rules helps avoid penalties and keeps commercial activity fully compliant.

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