( Guide · Ecommerce · Saudi Arabia )

VAT registration in Saudi Arabia for online stores and apps: thresholds, foreign sellers, marketplaces and penalties

A business resident in Saudi Arabia must register for VAT with the Zakat, Tax and Customs Authority (ZATCA) when its taxable supplies in the last 12 months exceed SAR 375,000, or are expected to exceed that in the next 12 months, and it must apply within 30 days of the end of the month in which it crosses the line. It may register voluntarily once its supplies or expenses reach SAR 187,500. A foreign business that has to account for VAT on sales in the Kingdom, such as an overseas app or SaaS selling to Saudi consumers, has no threshold: it must register within 30 days of its first such sale. Since amendments adopted in November 2024, a non-resident online marketplace selling to consumers in the Kingdom must register whatever its sales, and from January 2026 a marketplace that controls the sale is treated as the supplier for small sellers who are not registered. Once registered, you charge 15%, issue tax invoices through e-invoicing, file returns quarterly (monthly above SAR 40 million) and keep records for at least six years. Late registration costs a fixed SAR 10,000. OGB Labs builds online stores, apps and checkouts for Saudi businesses, and this guide explains the registration rules from ZATCA's own regulations and guidelines.

By OGB Labs · Published 22 October 2026

The rules, and where to read them

Saudi VAT rests on the GCC Unified VAT Agreement, the VAT Law and the Implementing Regulations of the VAT Law, all administered by ZATCA. The registration rules in this guide come from the Implementing Regulations, the guideline on the November 2024 amendments.PDF) (Board resolution 01-06-24 of 19 November 2024, guideline issue 1 of April 2025) and the guideline on tax invoicing and records (version 3, May 2026). ZATCA states that the Arabic text prevails over the English translations.

This is a practical summary for founders and product teams, not tax advice. ZATCA applies the rules to the facts of each business, so confirm your position with ZATCA or a licensed tax adviser before you rely on it.

When a Saudi business must register

The Implementing Regulations set two tests, and you check both at the end of every month:

Looking back: if the value of your taxable supplies in the Kingdom over the 12 months just ended exceeds SAR 375,000, you must apply within 30 days of the end of that month. Registration takes effect from the start of the month after you apply (Article 3).
Looking forward: if you expect your supplies over the next 12 months to exceed SAR 375,000, for example because you have signed a large contract or are launching a funded store, you must also apply within 30 days of the end of the month. Registration takes effect from the first month in which your supplies were expected to cross the threshold (Article 4).

What counts towards the SAR 375,000

The threshold is measured on taxable supplies, not on profit, so a store with thin margins can cross it early. ZATCA's guidelines and the Implementing Regulations leave some amounts out and add others in:

Exempt supplies, such as qualifying financial services and residential rent, are not counted.
Sales of capital assets used in your licensed activity are excluded, so selling an old delivery van or server does not push you over the line (Article 6, paragraph 5).
A business whose supplies are exclusively zero-rated does not have to register, even above the threshold, although it may register voluntarily (Article 9, paragraph 1).
Where related people run similar or connected activities, ZATCA may notify them that their supplies are to be added together. Splitting one store into several commercial registrations to stay under the threshold does not work (Article 9, paragraph 2).
Amounts in other currencies, such as Stripe payouts in US dollars, are converted to riyals at the Saudi Central Bank's daily rate on the date the tax becomes due.

Voluntary registration from SAR 187,500

A resident business that is not obliged to register may apply when its supplies or its expenses over the last 12 months were at least SAR 187,500, or are expected to reach that over the next 12 months (Article 7). Expenses count here, so a start-up spending heavily on development, stock and marketing before its first sales can qualify.

The reason to do it is input tax: once registered, you can deduct the 15% VAT charged on your business purchases from the VAT you collect, and ZATCA's guidance allows input tax on some purchases made before registration under the conditions in the Regulations. The cost is the compliance work: invoices, e-invoicing, returns and records. Voluntary registrants cannot ask to deregister within 12 months of registering unless they stop trading (Article 13, paragraph 8).

Foreign online stores, apps and SaaS: no threshold

A non-resident business that is obliged to pay VAT on supplies it makes or receives in the Kingdom must register regardless of value, within 30 days of the first supply on which it had to pay tax, and the registration takes effect from the date of that first supply (Article 5). In practice this catches overseas apps, subscriptions, online courses and other electronic services sold to Saudi consumers; when a Saudi VAT-registered business buys the same service, it usually accounts for the VAT itself under the reverse charge.

A non-resident registers on ZATCA's prescribed form either itself or through an approved tax representative, whose details go on the application (Article 9, paragraph 3), and must tell ZATCA within 20 days if it changes representative. A non-resident without a representative must also appoint a third party established in the Kingdom to keep its invoices and records, according to ZATCA's invoicing guideline. ZATCA's guideline for electronic contracts works through examples of digital services and online contracts if you need to decide where a supply takes place.

Marketplaces: who is the supplier after the 2024 amendments

The November 2024 amendments added a definition of an electronic marketplace to Article 47 of the Regulations: a digital platform whose primary or secondary purpose is to let suppliers showcase, offer, provide or contract for goods or services with customers. ZATCA's amendments guideline says a platform must actively facilitate the supply to count. One that only processes payments, only advertises, or only redirects shoppers to another site to buy does not.

Where a platform does facilitate the sale, the guideline sets out these outcomes:

A non-resident marketplace selling to unregistered customers in the Kingdom must register for VAT, whatever the value of its sales, and charge VAT on the full value of what it sells through the platform.
Where a non-resident supplier sells services through a marketplace that is VAT-registered in Saudi Arabia, the marketplace accounts for the VAT under the reverse charge and the foreign supplier does not need to register.
From January 2026, where a marketplace facilitates sales by Saudi-resident suppliers who are not VAT-registered, the marketplace is treated as having bought and resold the goods or services in its own name. If it is registered, VAT applies to the full value and the small seller does not charge VAT or issue tax invoices on those sales.
These deemed-supplier rules do not apply only where all three conditions are met: the contracts and the invoice or receipt name the seller as the actual supplier, the seller has a direct contract with the customer and sets the terms, and the platform does not set terms or prices, charge or collect payment, handle complaints, or give promotions or compensation.

What this means if you sell on a platform or run one

If you sell through a marketplace that sets the price, takes the payment and handles complaints, ask the platform in writing how it treats your sales for VAT, and keep the answer: your own registration test still applies to everything you sell through your own store, Instagram or WhatsApp. If you build a platform that takes orders for other sellers, these rules decide whether you must register and charge VAT on your sellers' sales. That affects your pricing, your seller contracts and the invoices your system issues, so settle it before launch and design the checkout around the answer.

A white-label store builder, where each merchant sets its own prices and is paid directly, is in a different position from a marketplace that runs the sale. Each model needs its own reading of the three conditions above.

How to register with ZATCA

Registration is online on the ZATCA portal. A company registers through its account after its commercial registration, and a sole trader uses ZATCA's VAT registration for individuals service: log in, choose VAT Registration for Individuals, complete the form, and ZATCA confirms by SMS and email. That page repeats the thresholds: registration is required above SAR 375,000 of annual revenue and optional between SAR 187,500 and SAR 375,000.

Under Article 8 of the Implementing Regulations, the application must contain at least:

The official name of the company, or the name and ID details of an individual.
The physical address of the place of business or residence, and an email address.
Any existing ZATCA electronic identification number, and the commercial registration number if you have one.
The value of annual supplies or annual expenses, which is how ZATCA checks which threshold applies.
The effective date of registration, or the alternative date you are asking for. ZATCA can agree to a later date, up to the start of the month after you apply, or to an earlier date if you were eligible then (Article 6).

After you apply

ZATCA may ask for supporting documents and must give you at least 20 days to provide them. It can refuse an application it cannot verify.
When it accepts, ZATCA issues a registration certificate showing the effective date and your Tax Identification Number. The number must appear on your tax invoices and on all VAT correspondence.
A resident business must display the certificate at its main place of business and branches where the public can see it.
Changes to the details you registered, such as your address or activity, must be notified within 20 days.
Customers can check your number with ZATCA's VAT registration verification e-service, so make sure the number on your invoices and website is right.

Your obligations once registered

ZATCA's return reminders, such as the July 2026 notice for monthly filers, repeat the filing deadline and the late-filing range. The 2024 amendments also explain how to correct a mistake in a filed return through the corrections section of a later return; the amendments guideline has worked examples.

The record rules matter for software choices. ZATCA's invoicing guideline says records must be kept electronically within the Kingdom and, for a resident business, on a computer or server located in the Kingdom, with an Arabic version of the data. Check where your store platform, ERP and accounting software actually hold your invoices; our guide to Saudi data residency and cloud hosting covers the hosting options.

Saudi VAT obligations for a registered online business
Obligation	The rule
Rate	15% standard rate on taxable supplies in the Kingdom, with zero-rated and exempt supplies as set out in the Law
Tax period	Monthly if taxable supplies over the previous 12 months exceed SAR 40 million; three months for everyone else, with the option to apply for monthly
Return and payment	File the return and pay by the last day of the month after the end of each tax period
Invoices	Standard tax invoice for business and government customers and for supplies over SAR 1,000; simplified tax invoice for consumers and supplies under SAR 1,000; both through e-invoicing
Records	Keep invoices, books and records for at least six years from the end of the tax period, in Arabic, stored in the Kingdom
Cash accounting	Available on application if taxable supplies are not more than SAR 5 million a year

Penalties online sellers meet most

ZATCA publishes its table of VAT violation fines, last updated 30 August 2026. The ones that catch growing online businesses are:

Selected Saudi VAT fines
Violation	Fine
Failure to apply for VAT registration	SAR 10,000
Failure to submit the tax return	5% to 25% of the tax that should have been declared
Failure to pay tax due	5% of the unpaid tax for each month or part of a month
Issuing a tax invoice while not registered	Up to SAR 100,000
Failure to keep tax invoices, books and records	Up to SAR 50,000
Incorrect return, or one that lowers the tax due	50% of the difference between the calculated tax and the tax due

The fines exemption initiative ends on 31 December 2026

ZATCA has announced that the Minister of Finance extended the Cancellation of Fines and Exemption of Financial Penalties Initiative for six months from 1 July 2026 to 31 December 2026. It cancels fines for late registration, late payment and late filing, and VAT return correction fines, if you register, file all outstanding returns and pay the full principal tax on them; an instalment plan is possible if you ask while the initiative runs and pay each instalment on time.

There are two limits that matter if you are only now realising you should have registered. The initiative does not cover penalties on any return that falls due after 30 June 2026, and ZATCA says any further extension beyond 31 December 2026 will not cover them either. It also excludes evasion penalties, fines under Article 45 of the VAT Law and fines already paid. If you crossed the threshold in the past, act before the end of December.

What to change in your store or app

Count your sales every month: a monthly report of the last 12 months' taxable sales across every channel (your store, marketplaces, social and WhatsApp orders) tells you when you approach SAR 375,000.
Do not show VAT or a VAT number before you are registered: an unregistered business that issues a document intended as a tax invoice faces a fine of up to SAR 100,000.
Once registered, show prices and invoices with VAT calculated at 15%, put your Tax Identification Number on every invoice, and let business customers enter their own VAT number so they receive a standard tax invoice.
Connect the store, point of sale and ERP to e-invoicing: every registered business issues invoices through compliant systems, and the integration waves are explained in our guide to ZATCA e-invoicing Phase 2.
Store invoices and order records in Arabic and inside the Kingdom, and keep them for at least six years.
If you run a marketplace, decide whether you control the sale under the 2024 rules, and design seller contracts, payouts and invoice wording to match.

Related Saudi rules for online businesses

VAT is one of several registrations a Saudi online business needs. The Saudi E-Commerce Law requirements cover what your store must display and your return and delivery duties, Saudi PDPL compliance covers customer data, and payment gateways in Saudi Arabia and Shopify in Saudi Arabia cover taking payment. If you also sell in the UAE or Oman, compare the rules in UAE VAT registration for online sellers and Oman VAT registration for online stores and apps.

How OGB Labs helps

We build Arabic-first online stores, marketplaces, apps and custom checkouts for Saudi businesses, with VAT-ready pricing, tax invoices, business-customer VAT numbers, e-invoicing integration with Fatoora and records hosted in the Kingdom where required. For platforms, we design the seller onboarding, payouts and invoices around the marketplace rules. We do not give tax advice, so we work alongside your accountant or tax adviser. See web development in Saudi Arabia, ecommerce and custom software, or message us on WhatsApp at +968 7111 0727.

( FAQ )

Questions people ask.

What is the VAT registration threshold in Saudi Arabia?

Registration is mandatory for a resident business whose taxable supplies in the last 12 months exceed SAR 375,000, or are expected to exceed that in the next 12 months. Voluntary registration is possible once supplies or expenses reach SAR 187,500. Foreign businesses that must account for VAT in the Kingdom register regardless of value.

How long do I have to register for VAT once I cross SAR 375,000?

You check your supplies at the end of each month. If the last 12 months exceed SAR 375,000, or the next 12 months are expected to, you must apply within 30 days of the end of that month. Registration normally takes effect from the start of the month after you apply, or, for the forward-looking test, from the month you expected to cross.

Does a foreign app or SaaS selling to Saudi customers need to register for VAT?

If it must account for VAT on supplies in the Kingdom, yes, with no threshold. It must apply within 30 days of the first such supply, and registration takes effect from that supply. When the customer is a VAT-registered Saudi business, the customer usually accounts for the VAT under the reverse charge instead.

Do I need to register for VAT if I sell on a marketplace like Amazon or Noon?

It depends on how the marketplace handles the sale. Since January 2026, a marketplace that sets prices, collects payment and handles complaints for sellers who are not VAT-registered is treated as the supplier and accounts for the VAT. Your own registration test still applies to everything you sell through your own store and other channels, so ask the platform how it treats your sales.

What is the penalty for late VAT registration in Saudi Arabia?

ZATCA's penalty table sets a fixed fine of SAR 10,000 for failing to apply for VAT registration. Issuing a tax invoice while unregistered can be fined up to SAR 100,000, and late filing and late payment fines are a percentage of the tax.

Can late registration fines still be waived?

ZATCA's Cancellation of Fines and Exemption of Financial Penalties Initiative runs until 31 December 2026. It requires you to register, file all outstanding returns and pay the principal tax, and it does not cover penalties on returns due after 30 June 2026.

How often do I file VAT returns in Saudi Arabia?

Quarterly, unless your taxable supplies over the previous 12 months exceed SAR 40 million, in which case monthly. A smaller business may apply to file monthly. Each return and payment is due by the last day of the month after the tax period ends.

What is the VAT rate in Saudi Arabia?

The standard rate is 15%, with some supplies zero-rated or exempt under the VAT Law and Implementing Regulations.

Can I register for VAT voluntarily before I make sales?

Yes, if your expenses over the last 12 months were at least SAR 187,500 or are expected to reach that over the next 12 months. Voluntary registration lets you deduct input VAT, but you cannot deregister within 12 months unless you stop trading.

Do I need e-invoicing as soon as I register for VAT?

Every VAT-registered business must issue its tax invoices and simplified tax invoices through compliant electronic systems. Integration with ZATCA's Fatoora platform is being phased in by waves; our ZATCA e-invoicing Phase 2 guide explains which businesses are in scope and when.

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