The Zakat, Tax, and Customs Authority confirmed that all goods and services provided by a person or entity registered in the system are subject to a 15% value-added tax.

The authority clarified that exports outside the Kingdom are subject to zero percent VAT, while the 15% tax applies to all imports.

The authority noted that only registered persons can deduct expenses in the tax return, provided that the expenses are within the economic activity and the tax has been incurred on them.

For more details, the authority invited reviewing the Imports and Exports Guide and consulting Article 49 on input tax deduction from the Executive Regulations of the VAT System via the following link: zat.ca/MtZ3nC.

Value-added tax

Value-added tax is one of the tax systems in effect in the Kingdom. It is an indirect tax imposed on all goods and services purchased and sold by establishments, with some exceptions.

The Zakat Authority emphasized that anyone engaged in an economic activity is required to register in the VAT system if annual revenues reach the mandatory threshold of SAR 375,000.

It pointed out that 'establishments whose revenues exceed SAR 187,500 but do not exceed SAR 375,000 are eligible for voluntary registration,' noting that 'establishments with annual revenues below SAR 187,500 are not eligible for VAT registration.'