VAT Registration Thresholds for Saudi Firms in 2026

Businesses operating in Saudi Arabia continue to face two clear thresholds for value-added tax (VAT) registration in 2026, with mandatory registration required once taxable supplies exceed SAR 375,000 and voluntary registration available from SAR 187,500. Registration carries no fee.

Mandatory registration applies when a company's taxable supplies exceed SAR 375,000 during the previous 12 months, or are expected to exceed that amount over the next 12 months. Voluntary registration is open to companies whose taxable supplies or taxable expenses reach SAR 187,500 within a 12-month period.

A Saudi-resident regional headquarters follows the same thresholds. It may register voluntarily below SAR 375,000 if its taxable supplies or expenses reach SAR 187,500. Where a regional headquarters exceeds SAR 375,000 solely through supplies that are inherently zero-rated, mandatory registration is not required, though voluntary registration remains an option. Such entities must keep evidence supporting the zero-rating.

VAT groups

Two or more legal persons may form a VAT group when each member is resident in Saudi Arabia with a legal establishment or fixed place of business, each is eligible for VAT registration, and the same person or persons directly or indirectly own at least 50% of each member's capital, voting rights, or market value — or one person controls the others. No member may be licensed to operate in a special zone, and at least one member must be a taxable person.

The representative member applies through the ZATCA electronic portal by selecting Indirect Tax, then VAT, then Register/Cancel VAT Group Registration, completing the form, uploading documents, and submitting. The application must include details for every member, including those not previously registered. The service standard for processing is 3 working days.

Once approved, the VAT group is treated as a single taxable person, with the representative member responsible for VAT obligations, while internal supplies between members are generally disregarded. VAT registration and VAT-group registration have no fixed expiry and remain effective until cancellation is approved.

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