Saudi VAT
Saudi VAT is the Value Added Tax administered by ZATCA, charged at a standard rate of 15% (raised from 5% in July 2020). On imports, VAT is charged on the customs value plus customs duty and any excise, so duty and VAT compound at the border.
VAT-registered importers account for import VAT on their VAT return, and Saudi Arabia mandates e-invoicing (Fatoora) — electronic issuance and reporting of invoices to ZATCA — which ties the tax system tightly to every commercial transaction. Correctly linking the import declaration to the VAT return is what keeps import VAT from becoming a real cost.
At 15%, Saudi VAT is a significant line on every import, and because it is charged on value plus duty, small classification errors compound. With ZATCA running both customs and VAT — and e-invoicing making transactions transparent — getting the import-to-VAT link right is both a cost and a compliance imperative.
What is the Saudi VAT rate?
15%, applied to most goods and services, including on the value-plus-duty of imports.
What is Fatoora?
Saudi Arabia's mandatory e-invoicing system, under which invoices are issued and reported electronically to ZATCA.