VAT in Saudi Arabia guide

Saudi VAT for digital service providers

The supply of digital services by non-resident providers to consumers is the subject to VAT regime since1 January 2018.   Those businesses, who do not have a place of residence (Non-resident) in the state of Kingdom of Saudi Arabia, will have to compulsorily register under VAT irrespective of the registration threshold, as soon as they make any supply for which they are liable to charge VAT. A Non-Resident should appoint a Tax Representative established in Saudi Arabia who is approved by GAZT.

List of digital services that are the subject of Saudi VAT

• Software;
• e-subscriptions;
• mobile applications;
• and digital content.

VAT rates

VAT is applicable on all supplies of goods or services, unless exempt or outside the scope of the levy.

In Saudi Arabia, the following rates of VAT apply:

• Standard rate: (5%)
• Zero rate: (0%)

The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for the zero rate or an exemption.

Late – registration penalties

Any taxable person who has not applied for VAT registration within the set time frame, shall be fined SAR10,000.