VAT in Saudi Arabia 2026 — 15% Complete Guide for Expats & Businesses
Everything you need to know about Saudi Arabia's 15% VAT — who pays it, what's exempt, how to calculate it, and tourist refunds.
Quick calculate: Use our free VAT calculator to add or remove 15% VAT from any amount instantly.
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What is VAT in Saudi Arabia?
Saudi Arabia introduced Value Added Tax (VAT) on 1 January 2018 at 5%, then increased it to 15% on 1 July 2020. VAT is a consumption tax — it is charged on most goods and services at every stage of the supply chain. The final consumer (you) bears the cost.
VAT is administered by ZATCA — the Zakat, Tax and Customs Authority (هيئة الزكاة والضريبة والجمارك) at zatca.gov.sa. Saudi Arabia has no personal income tax, so VAT is one of the government's main revenue sources.
Current VAT Rate
Rate
Type
Applies to
15%
Standard rate
Most goods and services
0%
Zero-rated
Exports, international transport, some financial services
Exempt
VAT-exempt
Residential rent, bare land, healthcare, education (domestic)
What is VAT-Exempt in Saudi Arabia?
Not everything attracts 15% VAT. Key exemptions and zero-rated items:
Residential rentals — renting a home or apartment is VAT-exempt
Healthcare services — doctor visits, hospital care, medications
Education services — school and university fees
Basic food staples — some essential food items are zero-rated
Exports — goods exported outside Saudi Arabia are zero-rated
Bare land sales — empty land is VAT-exempt (but constructed property attracts VAT)
International transport — flights departing Saudi Arabia
⚠️ Commercial property is NOT exempt. Renting commercial space (offices, shops, warehouses) is subject to 15% VAT. This catches many small business owners by surprise.
How to Calculate VAT
Adding VAT (VAT-exclusive price → total): Multiply the price by 1.15. Example: SAR 1,000 × 1.15 = SAR 1,150 (SAR 150 VAT)
Removing VAT (VAT-inclusive price → base): Divide the total by 1.15. Example: SAR 1,150 ÷ 1.15 = SAR 1,000 base price (SAR 150 was VAT)
💡 Use our VAT calculator to add or remove 15% VAT instantly — just enter the amount.
Who Must Register for VAT?
Businesses in Saudi Arabia with annual revenue above SAR 375,000 must register for VAT with ZATCA. Businesses with revenue between SAR 187,500–375,000 may voluntarily register. Businesses below SAR 187,500 are not required to register. Registered businesses collect VAT from customers and remit it to ZATCA quarterly or monthly.
ZATCA E-Invoicing (Fatoorah)
Since December 2021, Saudi Arabia has implemented mandatory e-invoicing (فاتورة إلكترونية). All VAT-registered businesses must issue electronic invoices that include a QR code. Consumer-facing invoices (B2C) require a QR code readable by the ZATCA Fatoorah app.
VAT Tourist Refund Scheme
Non-resident tourists visiting Saudi Arabia can claim a refund of VAT paid on eligible purchases. The scheme applies to purchases at participating retailers. Tourists receive a refund at airports when departing, via a dedicated tourist VAT refund service. Minimum purchase thresholds apply.
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Frequently Asked Questions
Does Saudi Arabia have income tax? ▼
No. Saudi Arabia has no personal income tax for individuals, whether Saudi nationals or expats. The main taxes are VAT (15%) on goods/services and Zakat (2.5%) on Muslim-owned business wealth and certain assets.
Is housing rent subject to VAT? ▼
Residential rental is VAT-exempt in Saudi Arabia. If you rent a home or apartment, you do not pay VAT on rent. Commercial rental (offices, shops) is subject to 15% VAT.
What is ZATCA? ▼
ZATCA (Zakat, Tax and Customs Authority) is Saudi Arabia's tax authority. It administers VAT, Zakat, excise tax, and customs duties. Website: zatca.gov.sa.
Is food subject to VAT in Saudi Arabia? ▼
Most processed and packaged food items are subject to 15% VAT. Some basic food staples may be zero-rated. Restaurant meals are subject to 15% VAT.