Saudi VAT Explained 2026 — 15% Rate, Rules & ZATCA

Saudi Arabia VAT — Complete Guide 2026

Saudi Arabia introduced Value Added Tax (VAT / ضريبة القيمة المضافة) on January 1, 2018 at a rate of 5%. In response to the COVID-19 pandemic's economic impact, the rate was tripled to 15% on July 1, 2020.

Who Must Register for VAT?

Businesses with annual taxable revenue exceeding SAR 375,000 must register
Businesses between SAR 187,500 and SAR 375,000 may register voluntarily
Foreign businesses supplying taxable goods/services to Saudi Arabia

What is Subject to 15% VAT?

Most goods and services in Saudi Arabia are subject to the standard 15% VAT rate, including electronics, clothing, restaurants, hotels, professional services, and construction.

VAT-Exempt and Zero-Rated Items

Most basic food items and vegetables
Healthcare services and medicines
Education services (accredited institutions)
Residential rent (first 3 years)
Exported goods and international services
Financial services (specific types)
Life insurance and reinsurance

Real Estate and VAT

As of October 2020, real estate transfers are subject to a 15% Real Estate Transaction Tax (RETT) instead of VAT. First-time Saudi homebuyers can claim a government rebate on RETT up to SAR 1 million on the property value.

Tourist VAT Refunds

Tourists visiting Saudi Arabia can claim a 15% VAT refund on eligible purchases at departure airports. Use the Planet tax refund service with your original receipts. Minimum purchase SAR 200 per receipt.

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Frequently Asked Questions

When was Saudi VAT introduced?▾

VAT was introduced at 5% on January 1, 2018, and raised to 15% on July 1, 2020 to support government revenues during COVID-19.

Are supermarket groceries subject to VAT in Saudi Arabia?▾

Basic food items (staples, vegetables, dairy) are generally zero-rated. However, prepared foods, snacks, soft drinks, and restaurant meals are taxable at 15%.

How do I get a VAT invoice in Saudi Arabia?▾

Businesses registered for VAT must issue tax invoices for taxable sales. The invoice must include the ZATCA VAT number, tax amount, and QR code for simplified invoices.

More Free KSA Tools

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.

Saudi Arabia VAT 15% Explained