How it works
The rate
Saudi Arabia charges value added tax at 15% on most goods and services. The rate was 5% from the introduction of VAT in January 2018 until 30 June 2020, and 15% since 1 July 2020. The Zakat, Tax and Customs Authority (ZATCA) administers it.
Adding VAT to a net price
If you quote a price before tax, the amount payable is the net price times 1.15:
- net 1,000 riyals
- VAT: 1,000 × 15% = 150
- total: 1,150 riyals
Extracting VAT from a total
When a price already includes VAT, the net is the total divided by 1.15, and the VAT is the difference:
- total 1,150 riyals
- net: 1,150 ÷ 1.15 = 1,000
- VAT: 150 riyals
The usual mistake is to multiply the total by 15%, which gives 172.50 and overstates the tax.
Zero-rated and exempt supplies
Exports outside the GCC, international transport and some medicines and medical equipment are zero-rated: VAT applies at 0% and the seller can still recover input tax. Residential rent, life insurance and certain financial services are exempt, which means no VAT is charged and no input tax is recovered. This calculator assumes the standard rate.
Who must charge VAT
Businesses and individuals with taxable supplies above 375,000 riyals in any twelve months must register with ZATCA; those above 187,500 may register voluntarily. Only registered sellers may charge VAT, and every tax invoice must be issued through the e-invoicing (Fatoora) system.
Frequently asked questions
What is the VAT rate in Saudi Arabia?
15% on most goods and services since 1 July 2020, when it rose from 5%. Some supplies are zero-rated or exempt, such as exports, certain financial services and residential rent.
How do I remove VAT from a price that includes it?
Divide the total by 1.15. A receipt for 115 riyals is 100 riyals of goods plus 15 riyals of VAT. Multiplying the total by 15% would overstate the tax.
Should a freelancer add VAT to invoices?
Only once registered with ZATCA. Registration is mandatory above 375,000 riyals of taxable turnover in twelve months and optional above 187,500. Unregistered sellers must not charge VAT.
Is the VAT on an invoice rounded?
Yes, to the nearest halala (two decimals) per invoice line or total, as ZATCA's e-invoicing rules require. Hasiby rounds the same way.