Saudi VAT Rules Updated: Groups and Marketplaces

Businesses operating in Saudi Arabia should prepare for updated Value Added Tax (VAT) rules approved in 2025, which introduce revised provisions for VAT groups and new obligations for electronic marketplaces. The standard VAT rate remains unchanged at 15% on taxable supplies, including sales facilitated through online platforms.

The VAT group provisions take effect on 15 October 2025. Under the amended rules, every member of a tax group must continuously satisfy all grouping conditions throughout the registration period, maintaining close economic, financial, and organizational ties. Failure by any member to meet these conditions can lead the authority to cancel or reject the group registration.

Certain entities are restricted from joining VAT groups, including some refund-eligible persons and businesses licensed in special economic zones with customs suspension status, except in limited cases explicitly allowed. Each group must appoint a representative member responsible for filing consolidated VAT returns and paying VAT on behalf of the group, while every member remains jointly liable for the tax due.

New rules for online marketplaces

From 1 January 2026, the deemed-supplier provision for electronic marketplaces comes into force. An electronic marketplace is defined as an electronically operated distribution service — including websites, portals, platforms, and online stores — that enables suppliers to provide goods or services to customers.

A marketplace acting as an intermediary for non-resident suppliers or non-registered resident suppliers within the Kingdom will be treated as having acquired and resupplied the goods or services on its own account, making it the deemed supplier for VAT purposes. In that role, it must register for VAT if thresholds are met, charge 15% VAT, issue invoices in its own name, file returns, remit VAT, and keep proper records.

An exception applies for non-resident suppliers when the contract explicitly names the non-resident as the principal supplier, the invoice clearly identifies them, and the marketplace does not set the supply terms. The changes matter for residents and expats who buy and sell online, as platforms take on greater tax responsibility.

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