Value Added Tax (VAT)

We would like to inform you that Value Added Tax (VAT) will be implemented in the Kingdom of Saudi Arabia on 1 January 2018. As a result, 5% to fees that are subject to the VAT Law will be applied from 1 January 2018.

Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is applied in more than 160 countries around the world as a reliable source of revenue for state budgets. VAT is imposed at each stage of the supply chain from the production and distribution to the final sale of the good or service. Saudi Arabia is committed to impose VAT with effect from January 1, 2018 (Rabi Al-Thani 14, 1439). VAT will be introduced at a standard rate of 5%.

For more information about VAT, Please visit the following link www.vat.gov.sa​


General FAQ

The following section aims to provide basic information on the introduction of VAT in the Kingdom of Saudi Arabia. This information and other parts of the VAT website will be updated regularly ahead of the introduction of VAT on 1 January 2018.

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What is value added tax (VAT) and how does it work?

Value Added Tax (or VAT) is an indirect tax which is imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is used in more than 160 countries around the world as a reliable source of revenue for state budgets.

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Why is VAT being introduced?

The unified VAT agreement for the GCC treaty for a unified framework agreement to introduce VAT came into application. In line with the framework, Saudi Arabia is introducing Value Added Tax (VAT) on 1st January 2018.

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Where can I access VAT law?

VAT Law, that was published in 04/11/1438 is available in full here


When will VAT be introduced?

VAT will be introduced in Saudi Arabia on January 1st 2018.

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Will VAT cover all good and services?

5% to fees that are subject to the VAT Law will be applied.

At what rate will VAT be introduced?

All goods and services will be subject to VAT. However, some goods and services will be exempt. For further information on exempted items please read chapter 5 of the​ Implementing Regulations 

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