VAT registration is mandatory if the value of annual taxable supplies exceeds 375,000 riyals, and voluntary registration is allowed if it exceeds 187,500 riyals. The standard rate is 15%, and returns are filed no later than the end of the month following each tax period.
Registration thresholds
- Registration is mandatory if the value of annual taxable supplies exceeds 375,000 riyals.
- Registration is voluntary if the value of annual taxable supplies exceeds 187,500 riyals but does not exceed 375,000 riyals.
- Registration is done online through the portal of the Zakat, Tax and Customs Authority (ZATCA).
Source: ZATCA: VAT registration service (registration thresholds)
Current rate
The standard VAT rate is 15% on supplies of goods and services subject to the standard rate that are made from 1 July 2020. Some supplies are exempt or zero-rated.
Source: ZATCA: Guideline on changing the VAT rate to 15% (in Arabic)
Return deadlines
- Businesses whose annual taxable supplies exceed 40 million riyals file their returns monthly.
- Other businesses file quarterly.
- The deadline to file the return and pay the tax is the end of the month following the tax period. Example: for a quarterly period ending 31 March, the return is due by 30 April.
Source: ZATCA: News item on monthly returns for businesses with supplies above 40 million riyals (in Arabic), ZATCA: Zakat and tax returns calendar
What to prepare before registering
- The official details of the business and its commercial registration
- The value of your taxable supplies over the past 12 months, and the expected value over the next 12 months
- A description of the types of supplies you make, to identify which are taxable and which are exempt
Common mistakes
- Registering late after exceeding the mandatory threshold
- Calculating VAT on an amount that already includes VAT as if it were the amount before VAT
- Filing the return without reconciling sales and purchases with the invoices
Official sources
This is general information for awareness purposes and does not constitute professional advice on your specific situation. Regulatory requirements may change, so please check the official source or contact us before making any decision.