The VAT Tax Period in Saudi Arabia is monthly for taxable persons whose annual value of taxable supplies exceeds SAR 40 million during the previous twelve months, and quarterly (three months) for all other taxable persons, with the return and the tax due to be filed and paid no later than the last day of the month following the end of the Tax Period.

When Is the Tax Period Monthly?

The Implementing Regulations of the VAT Law provide that for taxpayers whose annual value of taxable supplies exceeds SAR 40,000,000 during the previous twelve months, the Tax Period shall be monthly. For all other taxpayers, the standard Tax Period shall be three months.

Changing the Tax Period

A taxable person whose annual supplies do not exceed the above threshold may apply to use a monthly Tax Period, and the change takes effect from the start of the Tax Period following the approval. A taxable person who has used the monthly Tax Period for two years may apply to revert to the three-month period, provided that their annual taxable supplies do not exceed the prescribed threshold at the time of the application. The Authority may also direct a taxable person to use a certain Tax Period by notification.

Filing the Tax Return

The Tax Return of a Taxable Person must be filed by the Taxable Person or a person authorized to act on his behalf for each Tax Period with the Authority no later than the last day of the month following the end of the Tax Period. A validly filed return is treated as the taxable person's self-assessment of the tax due for that period, and the Authority has the right to issue an assessment based on its best estimate where the taxable person fails to file a return.

Payment of the Tax Due

Payment of the Tax due in respect of a Tax Period must be made at the latest by the last day of the month following the end of that Tax Period — the same deadline as for filing the return. A validly filed return is legally considered the taxable person's own self-assessment of the tax due for that period, which makes meeting both the filing and payment deadlines essential to avoid liability or delay penalties.

The Importance of Using the Correct Period

Choosing the correct Tax Period, whether monthly or quarterly, directly affects the pace of a business's compliance obligations. Moving from one period to another requires a formal application to the Authority and its approval, and the change only takes effect from the start of the Tax Period following that approval, not immediately or retroactively.

Illustrative Example

If a business's supplies over the previous twelve months reached SAR 44 million, this exceeds the SAR 40 million threshold, so its Tax Period is monthly, and it must file its return and pay the tax due for, say, January no later than the last day of February. Another business with annual supplies of only SAR 5 million would have a quarterly Tax Period, and the return for the first quarter (January-March) would be due no later than the last day of April.

Legal References

For questions about your specific situation, you can ask the Saudi Arabia Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.