Saudi VAT 2026: Registration Thresholds Explained

Businesses operating in Saudi Arabia continue to face a standard Value Added Tax (VAT) rate of 15% on taxable goods and services in 2026, with clear thresholds determining when registration becomes mandatory. For new and expanding companies, understanding these rules is a core compliance step.

Resident businesses are legally required to register for VAT once their annual taxable supplies reach or exceed SAR 375,000 in any rolling 12-month period. This also applies if a business forecasts that its supplies will reach that figure over the coming 12 months. Turnover is measured on taxable supplies — both standard-rated and zero-rated — while exempt supplies are generally excluded.

Smaller and growing firms with annual taxable supplies or taxable expenses between SAR 187,500 and SAR 375,000 may register voluntarily. This option allows them to recover input VAT, though it remains optional. Businesses below the SAR 187,500 mark are not eligible to register.

Non-resident businesses face no threshold at all. They must register for VAT from their first taxable supply in the Kingdom, typically through a Saudi tax representative.

Once a resident business crosses the mandatory threshold, it must submit its VAT registration promptly — within 20 to 30 days of passing the threshold,

How to register

VAT is administered by the Zakat, Tax and Customs Authority (ZATCA), and registration is completed online through its portal. Businesses log in and follow the path: General Services → VAT Registration → complete the form, then receive confirmation by SMS and email. Individuals follow the E-Services → VAT → Individuals Registration in VAT path.

For the local business community, staying within the rules avoids penalties and, for eligible firms, opens the door to recovering input tax. Owners uncertain about their turnover position should track their rolling 12-month supplies closely to know when action is required.

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