The thresholds at a glance
| Your annual taxable supplies | VAT registration |
|---|---|
| Above SAR 375,000 | Mandatory: you must register |
| SAR 187,500 to SAR 375,000 | Voluntary: you may register |
| Below SAR 187,500 | You can’t register |
The test looks at your taxable supplies over the past 12 months, and also at what you expect over the next 12 months. A new business that expects to pass SAR 375,000 soon may need to register before its past sales reach that figure.
Voluntary registration is also possible when your taxable expenses, rather than sales, exceed SAR 187,500, which helps new businesses reclaim VAT on setup costs.
Businesses based outside Saudi Arabia that make taxable supplies in the Kingdom have no threshold and must register from their first taxable supply.
Registering with ZATCA
You register online with the Zakat, Tax and Customs Authority (ZATCA), usually with your commercial registration and business documents. ZATCA then issues a 15-digit VAT registration number, which must appear on every tax invoice you issue.
Register as soon as you pass, or expect to pass, the threshold. ZATCA can fine businesses SAR 10,000 for registering late, and it applies further fines for late filing and late payment.
Filing VAT returns
| Annual taxable supplies | Return period | Deadline |
|---|---|---|
| Above SAR 40 million | Monthly | End of the following month |
| SAR 40 million or less | Quarterly | End of the month after the quarter |
Each return reports the VAT you charged on sales (output VAT) and the VAT you paid on business purchases (input VAT). You pay the difference to ZATCA, or reclaim it if you paid more than you charged.
E-invoicing (FATOORA)
VAT-registered businesses must issue electronic invoices. ZATCA is bringing businesses into the second phase, integration with its FATOORA platform, in waves based on revenue. Watch for ZATCA’s notice telling you when your wave begins.
Working out VAT on your prices
At 15%, a price of 1,000 SAR before VAT becomes 1,150 SAR, and the VAT inside a total of 1,150 SAR is 150 SAR (total × 15 ÷ 115). The VAT calculator does both in one step.
This guide covers the main rules for businesses. For your own registration, filing or penalties, check ZATCA’s website or ask a tax adviser.