VAT Guide 2026: Registration and Filing for New Businesses

New businesses operating in Saudi Arabia must understand their value-added tax (VAT) obligations, which remain in force in 2026 with a standard rate of 15%. Registration and filing are handled through the ZATCA VAT portal, and the rules apply to residents and non-residents alike.

Registration becomes mandatory once a business reaches SAR 375,000 in taxable supplies over the previous 12 months, or expects to reach that figure in the coming 12 months. Businesses that cross this threshold must register within 30 days. Voluntary registration is available at SAR 187,500 of taxable supplies or expenses. Non-resident businesses must register from their first taxable supply and are required to appoint a Saudi-based tax representative.

Filing and Deadlines

Filing frequency depends on turnover: businesses with annual taxable turnover above SAR 40 million file monthly, while others file quarterly. Returns and payments are due by the last day of the month following the tax period. Even when there is no taxable activity, a nil return must still be submitted. Late filing or late payment can trigger penalties ranging from 5% to 25% of the tax amount, plus a possible late-payment surcharge.

Smaller establishments have some flexibility. Those whose annual supplies do not exceed SAR 5 million may use cash-basis accounting. Simplified tax invoices are permitted for lower-value transactions and must be in Arabic, showing the issuance date, supplier name and address, item or service description, payment amount, and VAT value. If the invoice total is below SAR 1,000, the supplier's VAT registration number is not required.

Businesses should also prepare for E-invoicing Phase 2, which is expanding in phased waves during 2026. Wave 24 sets a deadline of 30 June 2026 for VAT-registered residents whose taxable revenue exceeded SAR 375,000 in 2022, 2023, or 2024. Staying compliant helps new companies avoid penalties and operate smoothly.

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