VAT Rates in Saudi Arabia

The standard vat rate in Saudi Arabia is 15% issued only for certain goods and services from July 2022 taking place of the older rate of 5%. The new regulations are lengthy documents, so companies should make sure they are aware of all the consequences of the mistakes while implementing VAT. BMS Auditing provides affordable and simplistic vat services in KSA for you to deal with all the complications related to VAT

Value Added Tax (VAT) in Saudi Arabia

The Kingdom of Saudi Arabia is one of the wealthiest countries with vast land and valuable resources such as petroleum, natural gas, iron ore, gold, and copper. The country has made tremendous wealth through these natural resources thus improving economic growth and success.

So, there are a lot of businesses that are upsurging in the KSA since it is the region with potential. All companies with taxable sales above 375,000 SAR in the last 12 months (or anticipated taxable sales in the following 12 months) are required to register, collect tax, and file VAT reports.

If you wish to start a business in Saudi Arabia, it is essential to understand the VAT laws, VAT Rates and regulations of the country, stay compliant, and be updated always to avoid VAT penalties and fines in KSA. 

VAT Rates in KSA

Based on the VAT Rates applied for the goods and services, they are classified into three types

1. Standard Supplies
2. Zero-rated products
3. Exempted Products

Standard VAT Supplies

Unlike the Vat rates in UAE which has a standard VAT rate of 5%,  the updated VAT rate in Saudi Arabia is 15% on all goods and services. This rate was launched in July 2020, taking place of the older rate, which was 5%. 

Most goods and services bought, sold, or imported to the country would be affected by this rate unless declared exempted. 

Here are certain taxable goods and services:

• Food & beverages- fast foods, basic groceries
• Education services 
• Private healthcare services 
• Local transport
• All types of insurance except life insurance

Zero-rated Products:

These products are charged at 0%. Here are the products:

• Medication and medical services prescribed by the Ministry of Health and Saudi Food & Drug Authority
• Providing gold, silver, and platinum (99% purity or higher) for investment reasons
• Export to non-GCC residents or outside the Council Territory
• Services delivered to non-GCC residents
• Internationally transporting the goods or passengers

Exempted Products:

These goods and services vary from zero-rated products. These are not affected by VAT. 

• Giving residential real estate for rent
• Financial services, loans, mortgages, fees on credit cards, issuing or transferring debt or equity security, issuing an insurance policy, etc. 

In a nutshell, you need not register for VAT despite your turnover being above 375,000 SAR (exceeding the mandatory margin) 

VAT Services in Saudi Arabia

BMS Auditing Saudi Arabia is one of the leading companies providing VAT services in KSA. At BMS, we have extensive knowledge and experience with VAT laws and regulations. You can consult with the BMS team regarding the updates on VAT and VAT rates. 

Need assistance on VAT Rates in KSA? Consult BMS!!