1Issue 2 | Mary 2026

Electronic Interface or Portal Acting in the Name of the Principal (“Declared Agent”) In the case of a declared Agent, the principal supply is made directly from the seller to the end Customer, and the Agent may charge the Principal a specified amount for the work performed on their behalf. Supply from the Seller to the End Customer: The principal supply of goods and services is subject to VAT in accordance with the standard rules for direct supply from the Supplier to the Customer. When the Principal supplies directly to Customers, they remain the person obligated to collect output tax on the supply and to issue a tax invoice (even if the Agent assists in issuing invoices or collection procedures on their behalf). The Agent may issue a tax invoice on behalf of the taxable Principal provided certain conditions are met (please refer to the VAT Invoicing Guideline). In such cases, the Principal is responsible for the accuracy of the information on the tax invoice as well as for the declaration of output tax on the supply (please refer to the Guideline on Agents). The end customer receives the supply directly from the Principal and is therefore eligible to claim an Input Tax deduction, provided the tax was incurred as part of their Economic Activity in relation to Taxable Supplies (please refer to the Input Tax Deduction Guideline). The Agent may perform certain tasks to facilitate the sale, such as delivering goods, issuing invoices, or collecting payments, provided the Agent acts in the name of the Principal (and the agency relationship is disclosed to third parties). Accordingly, the completion of these tasks by the Agent does not affect the applicable tax treatment. Supply from a Declared Agent to the Principal: The Agent may agree to act in the name of, and on behalf of, the seller or the end customer. The Agent receives a commission or other remuneration for performing these services. This is treated as a separate Supply of Services distinct from the principal supply arranged on behalf of the Principal. For this supply, the Agent acts as the Supplier, and the Principal acts as the Customer. In all cases, the supply of agency services to a Principal in the Kingdom is subject to VAT at the standard rate, regardless of whether the principal supply of goods and services is subject to VAT. Example 1: Mohammed imported goods from China with a value of SAR 100,000 and displayed them on an electronic platform. All products were sold through the electronic platform for SAR 200,000 in Mohammed’s name. At the end of the tax period, the electronic platform issued a tax invoice to Mohammed for its commission in the amount of SAR 50,000. Mohammed must declare sales of SAR 200,000 and purchases of SAR 150,000 if the relevant tax conditions are met, or claim Input Tax on purchases of SAR 50,000 only if the customs documentation is not in the Taxable Person’s name. In all cases, Mohammed must retain the tax invoice issued by the electronic platform and the customs documentation issued by Customs in order to preserve his right to Input Tax deduction. The commission must also be reported as sales in the amount of SAR 50,000. An Agent acting on behalf of a Principal who is not resident in the Kingdom must determine whether the relevant supply qualifies for the zero rate or not. The Implementing Regulations of the Law permit the application of the zero rate to services supplied to a Customer who has no place of residence in the Kingdom, subject to certain conditions being met in this regard. Example 2: Company “B” is a company resident in Jordan that provides remote computing services to businesses throughout the Middle East. Company “B” has no physical presence in the Kingdom but has a number of VAT-registered Customers in the Kingdom. Company “B” engages an electronic payment agent in the Kingdom to establish a portal that enables the collection of amounts due from Company “B”’s Customers and their transfer in US dollars to Company “B”’s bank account in Jordan, and the electronic payment agent has no obligations toward Company “B”’s Customers. In this case, the electronic payment agent provides a service from which Company “B” receives the principal benefit in Jordan, while Company “B”’s Customers in the Kingdom receive and benefit from that service only incidentally. Accordingly, the electronic payment agent must apply the zero rate of VAT to its services.