VAT in Saudi Arabia is charged at 15% and administered by ZATCA, the Zakat, Tax and Customs Authority. A foreign-owned company must register once its taxable turnover passes SAR 375,000 over 12 months, issue compliant e-invoices and file on time. This guide covers the thresholds, the ZATCA registration steps, the other taxes you will meet (corporate income tax, zakat, withholding tax) and the penalty scale, all checked against zatca.gov.sa.
The test uses taxable supplies (standard-rated and zero-rated sales, excluding exempt supplies) over the past 12 months, or expected over the next 12.
Table 1
| Taxable supplies over 12 months | Status | What to do |
|---|---|---|
| Above SAR 375,000 | Mandatory registration | Apply on the ZATCA portal, in practice within 30 days of crossing the threshold |
| SAR 187,500 to 375,000 | Voluntary registration available | Useful to recover VAT on start-up costs; the test can also be met on taxable expenses |
| Below SAR 187,500 | Cannot register | Track turnover monthly so you see the threshold coming |
Registration is free and done online, in Arabic or English, once the company holds its commercial registration.
When the company is registered with the Ministry of Commerce, ZATCA generates a tax identification number (TIN). The same account is used for zakat, corporate income tax and VAT. See our company formation guide.
Actual and forecast turnover over 12 months, split between standard-rated, zero-rated and exempt sales. This figure decides whether registration is mandatory, voluntary or not possible.
Company details, national address, activities, the IBAN of the Saudi bank account, the authorised representative's details, sales and purchase figures. See the checklist below.
On zatca.gov.sa: "General services", then "VAT registration". The form is completed from the company's account. There is no government fee.
ZATCA notifies the outcome by SMS and email and issues the VAT registration certificate. No official processing time is published: allow a few working days, longer if ZATCA asks for more information.
Set up FATOORA-compliant invoicing software at 15%, then fix the quarterly or monthly filing and payment calendar.
ZATCA does not ask for a fixed set of attachments for this service; these are the details the form asks for, worth gathering beforehand.
E-invoicing applies to every resident business registered for VAT.
Table 2
| Phase | Since | Requirement | Who |
|---|---|---|---|
| Phase 1: generation | 4 December 2021 | Invoices generated and stored by a compliant electronic solution, with QR code and required fields; no handwritten, Word or Excel invoices | All resident VAT-registered businesses |
| Phase 2: integration | 1 January 2023, in waves | Invoicing software connected to ZATCA's Fatoora platform, set format and extra fields | Targeted groups, notified at least six months ahead |
| Wave 24 | By 30 June 2026 | Integration with Fatoora | VAT-able revenue above SAR 375,000 in 2022, 2023 or 2024 |
| Wave 25 | By 1 February 2027 | Integration with Fatoora | VAT-able revenue above SAR 187,500 in 2022, 2023, 2024 or 2025 |
Table 3
| Annual taxable supplies | Filing period | Deadline to file and pay |
|---|---|---|
| Up to SAR 40 million | Quarterly | Last day of the month after the quarter (for example 30 April for Q1) |
| Above SAR 40 million | Monthly | Last day of the following month |
A foreign-owned company deals with ZATCA for three other charges. The split depends on who owns the shares.
Table 4
| Charge | Who pays | Rate | Key point |
|---|---|---|---|
| Corporate income tax (CIT) | Share held by non-Saudi, non-GCC owners | 20% of adjusted net profit | A 100% foreign-owned LLC pays CIT on all of its profit |
| Zakat | Share held by Saudi or GCC nationals | 2.5% of the zakat base | The base differs from profit and includes equity items |
| Withholding tax (WHT) | The Saudi company, on payments to non-residents | 5%, 15% or 20% by type of payment | Dividends and interest 5%, royalties 15%, management fees 20%; paid within the first 10 days of the following month |
| Annual zakat / CIT return | The company | – | Filed within 120 days of the financial year end |
ZATCA's official scale ("Taxation Violation Fines" page, updated 30 August 2026).
Table 5
| Violation | Fine |
|---|---|
| Failure to apply for VAT registration | SAR 10,000 |
| Failure to file the return on time | 5% to 25% of the VAT that should have been declared |
| Failure to pay VAT due | 5% of the unpaid VAT for each month or part of a month |
| Incorrect return leading to less VAT | 50% of the difference between VAT calculated and VAT due |
| Tax invoice issued by a non-registered person | Up to SAR 100,000 |
| Failure to keep invoices, books and records | Up to SAR 50,000 |
| Evasion (false documents, unlawful refunds) | At least the VAT due, up to three times the value of the goods or services |
Tasis Partners is not an accounting firm. We coordinate the process; bookkeeping and tax returns belong to a licensed professional in Saudi Arabia.
Coordination
Prepares the VAT registration file with you, checks the ZATCA account and national address, follows the application through to the certificate, introduces you to an accountant and keeps your deadlines in the weekly update.
Bookkeeping and returns
Keeps the books, calculates output and input VAT, files VAT, withholding tax, zakat and CIT returns, and answers ZATCA queries. The accountant signs off on the figures professionally.
Decisions and records
Choose the invoicing software, send sales and purchases every month, approve returns before filing and pay SADAD bills on time.
The standard rate has been 15% since 1 July 2020. Some supplies are zero-rated (exports, for example) and some are exempt; check how each of your sales is treated with your accountant.
Registration is mandatory above SAR 375,000 of taxable supplies over 12 months, actual or expected. Between SAR 187,500 and SAR 375,000 it is voluntary. Our VAT threshold page explains the calculation.
Often yes when start-up purchases are large (fit-out, equipment, services), because registration lets the company recover the VAT paid on them. In return it must charge 15%, file returns and comply with FATOORA from day one. Decide with your accountant, using real figures.
ZATCA does not charge for VAT registration. The real costs are the accountant, the e-invoicing software and, if you use one, the support to prepare the file.
Failing to register carries a SAR 10,000 fine. Late filing costs 5% to 25% of the VAT to be declared, and late payment 5% of the unpaid VAT per month or part month (ZATCA scale checked in September 2026).
Generally no. The share held by non-Saudi, non-GCC owners is subject to 20% corporate income tax on adjusted net profit, not zakat. The 2.5% zakat applies only to Saudi or GCC-owned shares.
You apply online to ZATCA to cancel the registration, for example when taxable activity stops or turnover falls below the thresholds. Conditions such as a minimum registration period, the final return and settling any balance should be checked when you apply.
Information verified in September 2026. Amounts and timelines are observed ranges provided for information only. Government fees are set by Saudi authorities and may change: we confirm them in writing before you commit to anything.
In a free 30-minute call we look at your expected turnover, the threshold that applies and your first filing dates, then send a written proposal. VAT is part of our formation + trademark + VAT package; returns are signed by a licensed accountant.