WHAT IS VAT?
Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is applied in more than 160 countries around the world as a reliable source of revenue for state budgets. VAT is imposed at each stage of the supply chain from the production and distribution to the final sale of the good or service. Saudi Arabia is committed to impose VAT with effect from January 1, 2018 (Rabi Al-Thani 14, 1439). VAT will be introduced at a standard rate of 5%.
The following section aims to provide basic information on the introduction of VAT in the Kingdom of Saudi Arabia. This information and other parts of the VAT website will be updated regularly ahead of the introduction of VAT on 1 January 2018.