Quick overview
| Standard Rate | Reduced Rate | Other Rates |
| 15% |
The local name for VAT in Saudi-Arabia is …. ”Value Added Tax”.
There is basically only 1 VAT rate in Saudi-Arabia:
- Standard VAT rate is 15%
- There are no Reduced VAT rates
Recent developments
For more information about (recent) rate change developments in Saudi-Arabia, please click here.
Standard rate: ..%
The standard VAT rate of 15% applies since July 1, 2020. Before that the rate was 5%.
This rate applies for all transactions that take place in Saudi-Arabia, unless an exception applies (such as a reduced rate, the zero rate or an exemption, or a reason to treat the transaction as outside scope of VAT).
Zero rate (0%)
Examples of goods and services taxable at 0%
Saudi Arabia will treat intra-GCC products in the same way as non-GCC imports for the purposes of VAT, until the full integration of the Electronic Services System. This means that the concept of the implementing states is currently not live, and that supplies to GCC residents are treated in the same way as supplies to non-GCC residents.
- A direct export from Saudi Arabia to a place outside of the GCC territory
- Services provided to non-GCC residents
- International transportation. Within international transport, zero-rated goods and services include:
— International transport of passengers and goods
— Vehicles and equipment to be used for international transportation
— Certain goods and services provided in connection with international transportation - Medicines and medical goods considered as qualifying medicines and qualifying medical goods as per the classification issued by the Ministry of Health or any other competent authority from time to time. Qualifying medicines and medical goods will be part of the Ministry of Health’s formulary drug list
- Investment metals. Two types of transactions involving qualifying investment metals (gold, silver and platinum of 99% purity or higher) are zero-rated:
• A producer or refiner’s original sale of investment metal
• Any further sale of gold, silver and platinum where the purity level remains
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
- Certain financial and insurance services. This does not include instances where consideration payable is by way of explicit fees.
- Real estate. The supply by way of sale, lease, license or rental of a real estate property (except for the lease of commercial property) will qualify to be treated as exempt from VAT. The supply of hotel accommodation, non-hotel but serviced accommodation, or residential property held out for rent in a similar manner to hotel or serviced accommodation will not qualify for exemption. Any lease of commercial property or property designated or used for commercial purposes will not qualify for exemption.
A global VAT/GST rate overview can be found here (note this is a work in progress).
This post was last updated on June 8, 2021.
