1Issue 2 | Mary 2026

Electronic Interface or Portal Acting in Its Own Name (the “Undisclosed Agent”) The Agent acts in its own name in cases where the agency relationship is not disclosed to the third party, who therefore believes that it is dealing with the Agent as a Principal acting in its own name. The VAT Law in the Kingdom includes a special rule concerning the application of VAT to an Agent acting in its own name: "Where a Taxable Person supplies or receives Goods or Services in its own name on behalf of another person, it shall, for the purposes of applying the Law and the Implementing Regulations, be treated as having supplied or received those Goods or Services in its own This means that where the Agent acts in its own name, it shall be treated in the same manner as the Principal for VAT purposes: • The Agent receives a supply of goods or services from the seller (the Agent is treated as the Customer in respect of the purchase). • The Agent subsequently supplies goods or services to the final customer (the Agent is treated as the Supplier for the onward sale). VAT shall be applied to each supply separately based on the nature of each supply. In most cases, this will result in VAT being applied at the same rate to both supplies; however, this must be confirmed for each supply, as the circumstances may require different treatment. For example, where an Agent purchases domestic goods on behalf of a non-resident Principal and exports them to the Principal’s office outside the GCC, the initial purchase (subject to VAT at 15%) will be treated separately from the subsequent export (subject to VAT at 0%). In cases where the Agent acts in its own name, it is not customary for the Agent to make an independent supply of agency services. In most cases, the Agent’s remuneration is included within the profit margin or price differential between the purchase and the onward supply of goods or services. However, the Agent and the Principal may agree to provide distinct services (separate from and in addition to the main supplies of goods or services). Example 3: Company “X”, a distributor of office supplies, enters into an agreement with Company “Y”, a licensed sales agent registered for VAT purposes, to promote and distribute its products to businesses in the Asir region. The agreement stipulates that Company “Y” shall conclude contracts in its own name, but must remit all revenues collected to Company “X”, after deducting a commission of 5%. Company “X” also pays Company “Y” a fixed monthly fee of SAR 10,000 for its services (regardless of whether any sales are achieved). The fixed monthly fee constitutes consideration for a service that is separate from the principal supply of goods. Tax Disclosure for Company “X”: 1. Deduction of Input Tax incurred on the office supplies. 2. Deduction of Input Tax incurred on the fixed monthly fees (SAR 10,000). Tax Disclosure for by Company “Y”: 1. Issuance of a tax invoice and declaration of output VAT collected from Customers arising from the supply of office supplies, before deduction of the 5% commission. 2. Issuance of a tax invoice and declaration of output VAT arising from the Supply of Services (the fixed monthly fee of SAR 10,000).