1Issue 2 | Mary 2026
Para. 4.2.1Status unknownSaudi ArabiaRegulation
Issued by Zakat, Tax and Customs Authority (ZATCA)
Place of Supply
Under the general rules, a supply is treated as taking place in the Kingdom only if the goods are
located in the Kingdom at the time the dispatch to the Customer begins. If the goods are outside
the Kingdom at the time dispatch begins, the Supplier will not charge VAT on the sale of the goods;
instead, VAT will be charged at the time of importation(20).
Orders fulfilled from within the Kingdom, i.e., where the goods were located in the Kingdom at
the time dispatch began. In this case, the Supplier must charge VAT in the Kingdom.
Orders fulfilled from outside the Kingdom: The Place of Supply of orders fulfilled from outside
the GCC States is not in the Kingdom, as any supply of goods made prior to their importation is not
subject to VAT on the supply. Nevertheless, VAT must be charged in the Kingdom at the time of
importation. Accordingly, VAT is effectively applied in the external market in the same manner as
applied in the domestic market.
It is possible in some countries for the local Supplier to apply local VAT or sales tax to sales
transactions. The application of any tax on the goods in the country of origin will not affect the tax
treatment to be applied upon importation(21) into the Kingdom.
Orders fulfilled from GCC countries: The movement of goods from GCC countries to the
Kingdom will be treated in the same manner as transactions from outside the GCC, prior to the
implementation of the electronic services system. Accordingly, if delivery of the goods begins in
another GCC country, VAT will not be applied in the Kingdom on the supply; however, it will be
imposed upon importation of such goods into the Kingdom(22).
Cases relating to the movement of goods: Depending on the location of the Supplier, the recipient,
and the goods, the supply may take any of the following basic forms:
(20) Article 11, Supply of Goods with Transport, Unified VAT Agreement
(21) Article 27 3, Goods sold with transport, Implementing Regulations of the VAT
(22) Article 79 7, Transitional Provisions, Implementing Regulations of the VAT
Statement of
the case
From the Supplier to the Customer
Place of
Supply
Tax treatment
Electronic goods
supplied to the
Kingdom (inside
the Kingdom)
From a VAT-registered business in the
Kingdom to a VAT-registered business
in the Kingdom
The Kingdom
VAT is applied by the
Supplier resident in the
Kingdom
From a VAT-registered business in the
Kingdom to a resident Customer not
registered for VAT in the Kingdom
The Kingdom
VAT is applied by the
Supplier resident in the
Kingdom
From a VAT-registered business in the
Kingdom to a non-resident business or
Customer
Outside the
Kingdom
Zero-rated export (subject
to meeting the export
conditions)
From a person not registered for VAT in
the Kingdom to a resident business or
Customer in the Kingdom
The Kingdom
VAT is applied if there is tax
registration
Statement of
the case
From the Supplier to
the Customer
Place of
Supply
Tax treatment
Electronic
goods supplied
to the Kingdom
from outside
the Kingdom
From a non-resident
business in the
Kingdom to a VAT-
registered Customer in
the Kingdom
The Kingdom
In the case of importation, VAT shall be
applied upon the import of goods.
In the case of non-importation (i.e., the
goods are located within the Kingdom):
the Taxable Person resident in the
Kingdom shall account for the VAT
using the Reverse Charge Mechanism.
From a non-resident
business in the
Kingdom to a Customer
not registered for VAT
in the Kingdom
The Kingdom
In the case of importation, VAT shall
be applied at the time of importing the
goods.
In the case of non-importation (i.e., the
goods are located within the Kingdom):
VAT shall be applied by the non-
resident Supplier (please refer to the
registration rules).
The Arabic text is the legally binding version. The English translation is provided for guidance only.
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