VAT in Saudi Arabia is due on imported goods when they enter the Kingdom and is collected by Customs upon import, with the possibility of deferring payment to the tax return under certain conditions, while the export of goods and services is zero-rated provided the supplier retains evidence of export.
Collection of Tax on Import
The Implementing Regulations provide that the Tax due on the import of goods shall be payable on the import date, and Saudi Customs is responsible for collecting it under its own procedures. A taxable importer must provide Customs with its Tax Identification Number upon import.
Deferring Import Tax Payment Through the Tax Return
A taxable person may apply for authorization to pay Tax due on imports through their Tax Return instead of it being collected by Customs on import, provided they use a monthly Tax Period and intend to make imports at least monthly, can evidence that all returns and payments have been made on time over the previous twelve months, and provide sufficient evidence of continuing financial stability.
Exporting Goods and the Evidence Requirement
To apply the zero rate to an export of goods from the Kingdom to a place outside GCC territory, the supplier of those goods must retain evidence that the goods have been transported outside Council Territory within ninety (90) days of the supply taking place. This evidence must include at least: export documentation issued by Customs showing the goods formally cleared for export; commercial documentation identifying the customer and the place of delivery; and transportation documentation evidencing delivery or receipt outside Council Territory. A taxable person who does not hold this evidence may not treat the goods as exported outside Council Territory after the ninety-day period has elapsed, meaning the supply becomes subject to the standard rate instead of the zero rate.
The Reverse Charge Mechanism on Imported Services
When a taxable person in the Kingdom receives a service from a nonresident supplier under the place-of-supply rules, the taxable customer is treated as making the supply to itself and must report the Tax due on behalf of the nonresident supplier (as Output Tax) under the Reverse Charge Mechanism; where fully eligible to deduct that Tax, the Output Tax and Input Tax are reported in equal amounts in the return, resulting in no net tax payable.
This mechanism applies regardless of the size or value of the imported service: as a rule, every taxable person is responsible for accounting for Tax on services it receives from nonresident suppliers whenever the place of supply of those services falls within the Kingdom under the place-of-supply rules, ensuring such services do not escape Tax merely because their supplier is not registered there.
Illustrative Example
If a Saudi business exports goods worth SAR 50,000 to a customer outside the GCC, and within 90 days retains the customs export clearance document and the transportation documents evidencing the goods' arrival, this supply is zero-rated and no tax is charged on it, even though it remains a taxable supply that allows deduction of the related input tax.
Legal References
- IMPLEMENTING REGULATIONS OF THE VALUE ADDED TAX LAW — ARTICLE FORTY-THREE (collection of Tax on imports), ARTICLE FORTY-FOUR (payment of import Tax through the return) and Article 32 (evidence for exporting goods).
- 1Second Version| May 2026 Guideline — the section on the Reverse Charge Mechanism for imported services.
For questions about your specific situation, you can ask the Saudi Arabia Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.