1Issue 3 | May 2026

Vouchers 8.2. Loyalty Programs 9. Inventory 9.1. Input Tax Deduction 9.2. Lost, Stolen, or Damaged Goods 9.3. Repairs and Maintenance under Warranty 9.4. “On-Order” Inventory 9.5. Trial Periods 10. Special Cases 10.1. Second-Hand Goods 10.2. International Trade 10.3. E-Commerce 10.4. Sales Agents 11. Deduction of Input Tax 11.1. General Principles 11.2. Proportional Deduction of Input Tax 12. Tax Invoice Requirements and Other Tax Obligations 12.1. Issuance of Invoices 12.2. Submission of VAT Returns 12.3. Record Keeping 12.4. VAT Registration Certificate 12.5. Correction of Previous Errors 13. Penalties 14. Request for an Interpretive Decision (Tax Ruling) 15. Contact Us 16. Frequently Asked Questions 1. Introduction 1.1. Application of Value Added Tax Law in the Kingdom of Saudi Arabia The Kingdom of Saudi Arabia ratified the Unified Value Added Tax (“VAT”) Agreement for the Cooperation Council for the Arab States of the Gulf ("GCC") pursuant to Royal Decree No. (M/51) dated 3rd Jumada al-Ula 1438H/31st January 2017 ("Unified VAT Agreement"). Based on the provisions contained in the Unified VAT Agreement, the Kingdom of Saudi Arabia issued the VAT Law pursuant to Royal Decree No. (M/113) dated 2nd Dhu al-Qa'dah 1438H/25th July 2017 ("VAT Law"), as well as the Implementing Regulations of the VAT Law pursuant to the Board of Directors of the former General Authority of Zakat and Tax (currently, the Zakat, Tax and Customs Authority) Resolution No. (3839) dated 14th Dhu al-Hijjah 1438H/5th September 2017 ("Implementing Regulations of the Law"), and in the form amended by subsequent Board resolutions. 1.2. Zakat, Tax and Customs Authority On 22nd Ramadan 1442H/ 4th May 2021, the Council of Ministers issued Decision No. (570), providing for the merger of the General Authority of Zakat and Tax (GAZT) and the General Customs Authority into a single entity under the name of Zakat, Tax and Customs Authority (ZATCA). Since then, the Authority has efficiently undertaken the collection of Zakat, taxes, and customs duties, ensuring the highest levels of compliance by taxpayers in alignment with best practices. The Authority’s mission is to enable the Kingdom to become a global logistics hub by facilitating trade, protecting national security, regulating all activities related to customs operations and customs ports, and managing them in a manner that ensures their advancement to the highest levels of efficiency, productivity, and competitiveness. This is achieved through the provision of high-quality, client-centered services offered in alignment with best practices.