The General Authority of Zakat and Tax (GAZT) has announced the introduction of a Value Added Tax (VAT) across the country, effective January 1, 2018.
A Value Added Tax (VAT) is a form of indirect tax on the consumption or use of goods and services applied at the point of sale and charged on applicable transactions.
A registered business collects VAT charged to customers on supply of goods and services and pays VAT on goods and service purchased from its suppliers. The difference between the VAT collected from customers and the VAT paid to suppliers is then remitted to the General Authority of Zakat and Tax (GAZT).
VAT will be introduced across Saudi Arabia at a standard rate of 5%. Certain supplies of goods and services will be subject to a 0% VAT charge while some are exempt.
Refer KSA VAT regulations
VAT is a general consumption tax, and will apply to the majority of transactions of goods and services, unless specifically exempt by law. SAB LLC will apply and collect VAT where applicable on its services from January 1, 2018. Rates and charges on all existing SAB LLC contracts are VAT exclusive.
A business must register for VAT if their taxable supplies and imports exceed the mandatory registration threshold prescribed. Additional information for businesses can be found at:
VAT-registered businesses generally:
Common VAT Agreement of the States of the Gulf Co-operation Council
- General FAQs
- Technical FAQs