Saudi Arabia has implemented the Value Added Tax (VAT) starting January 1, 2018.
All businesses with annual revenues of more than SAR 375,000 are legally required to register for VAT with the General Authority for Zakat and Tax (GAZT), while all businesses with annual revenues of less than SAR 375,000 but more than SAR 187,500 have the option to register for VAT. Businesses with annual revenues of less than SAR 187,500 are not required to register for VAT.
VAT registered businesses have the advantage of deduction of input VAT against their output VAT.
The VAT registration of businesses with annual revenues of less than SAR 1 million have been extended to December 31, 2018.
Businesses which supply goods and services that are not subject to VAT are not required to register for VAT.