VAT Calculator (KSA — 15%)

What Is VAT in Saudi Arabia?

Value Added Tax (ضريبة القيمة المضافة — VAT) is an indirect consumption tax applied to most goods and services in Saudi Arabia at a standard rate of 15%. It is collected at every stage of the supply chain — from manufacturer to wholesaler to retailer — but ultimately borne by the final consumer.

VAT was first introduced in Saudi Arabia on January 1, 2018, at a rate of 5% as part of the GCC-wide VAT framework. The rate was subsequently tripled to 15% on July 1, 2020, as a fiscal response to the economic impact of COVID-19 and declining oil revenues.

The tax is administered by ZATCA (Zakat, Tax and Customs Authority — هيئة الزكاة والضريبة والجمارك), which handles registration, compliance, auditing, and enforcement.

VAT Rate History

Period	Rate	Context
Before Jan 1, 2018	0%	No VAT — Saudi Arabia had no consumption tax
Jan 1, 2018 – Jun 30, 2020	5%	GCC-wide VAT introduction (originally planned as permanent rate)
Jul 1, 2020 – Present	15%	Tripled due to COVID-19 fiscal pressure and oil price decline

How to Calculate VAT — Formulas

Adding VAT (Price Excluding VAT → Price Including VAT)

Removing VAT (Price Including VAT → Price Excluding VAT)

Worked Examples

Example 1: Adding VAT to a Restaurant Bill

Food & beverages total: SAR 350 (excluding VAT)

1. VAT Amount: SAR 350 × 0.15 = SAR 52.50
2. Total Bill: SAR 350 + SAR 52.50 = SAR 402.50

Example 2: Removing VAT from an Electronics Purchase

Receipt shows: SAR 5,750 (including VAT)

1. Original Price: SAR 5,750 ÷ 1.15 = SAR 5,000
2. VAT Paid: SAR 5,750 − SAR 5,000 = SAR 750

Example 3: Business Invoice with Multiple Items

Item	Price (excl. VAT)	VAT (15%)	Total
Office Supplies	SAR 2,000	SAR 300	SAR 2,300
Software License	SAR 8,000	SAR 1,200	SAR 9,200
Consulting Fee	SAR 15,000	SAR 2,250	SAR 17,250
Total	SAR 25,000	SAR 3,750	SAR 28,750

Zero-Rated vs Exempt vs Standard-Rated

Not all goods and services are taxed at 15%. Saudi Arabia's VAT law classifies supplies into three categories:

Category	Rate	Input VAT Recovery	Impact on Business
Standard-Rated	15%	✅ Fully recoverable	Most goods & services
Zero-Rated	0%	✅ Fully recoverable	No VAT charged, but can reclaim input VAT
Exempt	N/A	❌ Not recoverable	No VAT charged, cannot reclaim input VAT

Zero-Rated Supplies (0% VAT)

• Exports of goods and services outside GCC countries
• International transport — goods and passenger services
• Qualifying medicines — listed by the Saudi Food & Drug Authority (SFDA)
• Qualifying medical equipment — per ZATCA approved list
• Precious metals — gold, silver, platinum with 99%+ purity for investment
• First supply of residential property — within 3 years of completion (up to SAR 1M under government housing support)
• Qualifying means of transport — aircraft, ships for international use

Exempt Supplies (No VAT)

• Financial services — interest on loans, credit facilities, margin-based products
• Life insurance — premiums and related services
• Residential property rental — apartments, villas for living (NOT commercial)
• Local passenger transport — buses, metro within Saudi Arabia
• Securities — trading of shares, bonds, sukuk

VAT Registration

Type	Threshold	Deadline
Mandatory	Annual taxable supplies > SAR 375,000	Within 30 days of exceeding threshold
Voluntary	Annual supplies > SAR 187,500	Optional — benefits: input VAT recovery
Non-Resident	Any taxable supply in KSA	Before first supply — no threshold

How to register: Through the ZATCA portal at zatca.gov.sa. Required documents include commercial registration (CR), national address, bank account details, and financial records.

ZATCA E-Invoicing (Fatoora — فاتورة)

Saudi Arabia has implemented a mandatory e-invoicing system called Fatoora in two phases:

Phase	Effective Date	Requirement
Phase 1 — Generation	December 4, 2021	All VAT-registered businesses must generate electronic invoices and store them electronically
Phase 2 — Integration	January 2023 (waves)	Businesses must integrate with ZATCA's system for real-time reporting. Rolled out in waves by revenue size

E-invoice requirements: Each invoice must contain: seller & buyer TIN, invoice date, sequential number, description of goods/services, quantity, unit price, VAT amount, total, and QR code (for simplified invoices).

VAT Return Filing

Annual Revenue	Filing Frequency	Due Date
Above SAR 40 million	Monthly	Last day of the following month
Below SAR 40 million	Quarterly	Last day of the month after quarter end

Returns are filed through the ZATCA online portal. The return includes: total output VAT collected, total input VAT paid, net VAT payable (or refundable), adjustments for bad debts and credit notes.

Penalties for Non-Compliance

Violation	Penalty
Late VAT registration	SAR 10,000
Late filing of VAT return	5–25% of unpaid VAT
Late VAT payment	5% of unpaid amount + 1% per day (max 25%)
Tax evasion	Up to 3× the evaded tax amount
Failure to issue tax invoice	SAR 5,000 per instance
Incorrect tax invoice	SAR 10,000 per invoice
Failure to maintain records	SAR 50,000
Charging VAT without registration	Up to SAR 100,000

Tourist VAT Refund (2025)

Starting 2025, ZATCA has introduced a VAT refund scheme for international tourists. Key features:

• Applies to goods purchased from approved retailers during the tourist's visit
• Goods must be taken out of Saudi Arabia upon departure
• Refunds are processed at departure points (airports, seaports, land borders)
• The scheme is part of Saudi Arabia's Vision 2030 tourism promotion strategy

Input VAT vs Output VAT

Type	Definition	Example
Output VAT	VAT collected from customers on sales	You sell goods for SAR 1,150 — output VAT = SAR 150
Input VAT	VAT paid to suppliers on purchases	You buy supplies for SAR 575 — input VAT = SAR 75
Net VAT Payable	Output VAT − Input VAT	SAR 150 − SAR 75 = SAR 75 payable to ZATCA

If input VAT exceeds output VAT, the business can carry the credit forward to offset future VAT liabilities, or apply for a refund from ZATCA.