Saudi Arabia VAT / Sales Tax

Detailed vat / sales tax rates and rules for Saudi Arabia in 2026.

VAT / Sales TaxSAR

Saudi Arabia introduced VAT at 5% on January 1, 2018, as part of the GCC VAT framework. The rate was tripled to 15% on July 1, 2020, in response to fiscal pressures from low oil prices and the COVID-19 pandemic. VAT applies to most goods and services, with exemptions for certain financial services, residential real estate (rent), and local passenger transport. Education and healthcare services provided by government entities are also exempt.

Standard Rate

15%

Registration Threshold

SAR 375,000 annual turnover (mandatory); SAR 187,500 (voluntary registration)

Reduced Rates

0% — Exports, international transportation, certain pharmaceutical and medical supplies, and precious metals for investment0% — Supplies to diplomatic bodies and international organizations

How Saudi Arabia VAT / Sales Tax compares

Saudi Arabia’s standard VAT / sales tax rate of 15% is the 93rd highest of 203 countries TaxAtlas tracks, above the global average of 13.7% and Asia’s regional average of 9.6%.