Everything you need to know about the 15% VAT in the Kingdom: who pays it, what's exempt, how to calculate it, and the ZATCA e-invoicing (Fatoora) rules.
Saudi Arabia introduced Value Added Tax (VAT) in January 2018 at 5%, then raised it to 15% in July 2020. It is a consumption tax applied to most goods and services at every stage of the supply chain. The final consumer ultimately bears the cost.
It is administered by the Zakat, Tax and Customs Authority (ZATCA) via zatca.gov.sa.
| Rate | Type | Applies to |
|---|---|---|
| 15% | Standard rate | Most goods and services |
| 0% | Zero-rated | Exports, international transport, some financial services |
| Exempt | Exempt from tax | Residential rent, bare land, healthcare, education |
Adding VAT (price excl. tax → total): multiply by 1.15. Example: SAR 1,000 × 1.15 = SAR 1,150 (SAR 150 is tax).
Removing VAT (tax-inclusive price → original price): divide by 1.15. Example: 1,150 ÷ 1.15 = SAR 1,000 original (SAR 150 was tax).
Since December 2021, ZATCA requires all VAT-registered businesses to issue approved electronic invoices that include a scannable QR code, verifiable via the Fatoora app.
Sources: Zakat, Tax and Customs Authority (ZATCA) VAT regulations and public guidance. Figures and rules are set by the issuing authority and may change — verify current details on the official portal before relying on them. Last reviewed: June 2026.
⚠️ Disclaimer: All results are estimates based on publicly available Saudi government regulations and rates. Always verify important financial or legal decisions with your employer, bank, or the relevant Saudi authority (Ministry of Human Resources, GOSI, ZATCA, Jawazat, or SAMA).