1Fourth Version | May 2026

• The main establishment or head office; or • Any other permanent location, with appropriate human and technical resources, from which the business is carried out. This may include a branch or other establishments of a corporate entity established outside the Kingdom, provided that such branch or other establishments are the most closely related to the supply in question. “Resident”: A person is considered a resident of a country if they do not have a place of residence there, according to the Uniform VAT Agreement. “Special Cases”: Supplies of Services which are considered ‘Special Cases’ under the Place of Supplies rules in Section 2, Articles 17-21 of the Unified VAT Agreement. “Supply of Services”: Is defined for VAT purposes, being: Any form of supply for consideration in accordance with the Unified VAT Agreement, that does not constitute a Supply of Goods(8). “Unified VAT Agreement”: The Common VAT Agreement of the States of the Gulf Cooperation Council (GCC). 3. Place of Supply of Services Article 33 allows for the application of a zero percent tax rate to service supplies made within the Kingdom. If the place of supply of taxable services within the Kingdom generally subjects that supply to the standard tax rate, it may be subject to a zero percent tax rate if the provisions of Article 33 are applied. However, if the place of supply is outside the Kingdom, the supply will be outside the scope of VAT. Therefore: If the place of supply is in the Kingdom, this may affect the application of the zero percent rate in cases where the place of supply for certain categories of services is determined by an exception to the general rule. Chapter 5.1 of this guideline provides additional details on the application of the zero percent rate to “special categories” of services. Therefore: Before analysing whether the zero-rate provided in Article 33 of the Implementing Regulations applies to a supply of services, the supplier must consider if the place of supply of the services is in the KSA. (8) Article 7, Unified VAT Agreement The country in which a supply takes place is determined in accordance with “Place of Supply” rules set out in the Unified VAT Agreement. As a general rule, a supply of services made by a KSA resident supplier will also have a place of supply in the KSA, and will be subject to KSA VAT rules(9). However, there are exceptions where the place of supply differs to this general rule. 3.1. Exception Based on Customer’s Residence: Supplies to Taxable Persons The first case concerns services supplied to Taxable Persons who are Resident in any other Member State, and registered for VAT in that other State. The place of supply for these services is the Member State where the Customer has its Place of Residence(10). This exception applies only after the full implementation of GCC VAT, provided that: • Any member state that has not implemented VAT or does not have a system for electronic services in place with regard to the Kingdom will be treated as a country outside the GCC territory in accordance with the provisions of the agreement. Inter-territory supply that takes place with that country will be considered as if it took place in a country outside the GCC territory, and persons residing in that country will be treated as residents outside the GCC territory. Please note this exception does not apply to services which are provided to a non-GCC Resident. The place of supply for services supplied by a Saudi-Resident Supplier to a non-GCC Resident Customer is in the KSA (unless any one of the Special Cases outlined in Section 3.2 apply). Services supplied to a non-GCC Resident Customer are therefore generally subject to KSA VAT, but may qualify for zero-rating. 3.2 Exception Based on the Nature of Services: Special Cases In addition to the general rule of place of supply, which is based on the supplier’s or customer’s place of residence, certain services (“Special Cases”) may require exceptions/special rules regarding place of supply due to the nature of the service. The Agreement stipulates five main categories subject to special provisions as follows: (9) Article 15, Place of Supply of Services, Unified VAT Agreement. Note that in the case where the supplier has multiple establishments, the supplier’s place of residence will be the country most closely connected with the supply. (10) Article 16, Unified VAT Agreement. Article 21, Implementing Regulations. 1. Leasing Means of Transport to Non-Taxable Customers:(11) 2. Supply of Goods and Passenger Transportation Services:(12) 3. Supply of services which are closely linked to Real Estate:(13) 4. Telecommunications services and electronically supplied services:(14) 5. Other services, which are considered to take place at the place of actual performance:(15) a. Restaurant, hotel and catering services. b. Cultural, artistic, sport, educational and recreational Services: the place of supply of these services is in the place of actual performance, when they are charged for as admission to an event at a physical location, or educational services provided in a physical location.(16) c. Services relating to transported Goods supplied to a Non-Taxable Customer residing in another Member State Services which are supplied in the KSA by virtue of these five Special Cases are also exceptions to the default zero-rate for services supplied to Non-GCC Residents. These exception cases are discussed in more detail in Section 5 of this Guideline. 4. Application of Zero-Rate to Services Supplied to a Non-GCC Resi­ dent The first paragraph of Article 33 of the Implementing Regulations applies the zero-rate to services supplied to a non-GCC resident, subject to the four exceptions outlined in the second paragraph (discussed in Chapter 5 of this Guideline).