This guide covers only the taxation of digital services. If you sell goods, this guide does not apply.
From 1st of January, 2018 VAT applies in the country in which the services are actually used or benefited from according to Article 20 of The Unified VAT Agreement for the Cooperation Council for the Unified Arab States of the Gulf Cooperation Countries that was approved by KSA by a Royal Decree No. M/51 dated 3/5/1438.
VAT Standard rate
The standard VAT rate in Saudi Arabia in 2022 is 15%.
Prices published to final consumers in the local market should be shown to be inclusive of VAT(31). If the price is VAT-inclusive (or if no mention is made of VAT), then VAT should be calculated as 5/105 of the VAT-inclusive price.
VAT Reduced rate
There is no reduced rate established.
Threshold
Registration is mandatory for all taxable persons whose annual turnover exceeds a certain threshold. If the total value of a person’s taxable supplies during a 12-month period exceeds SAR 375,000, the “mandatory VAT Registration Threshold”, that person must register for VAT.