VAT registration in Saudi Arabia: the thresholds, the 30-day deadline and the fine

When registration is mandatory

A resident business must register when the taxable supplies it made in the Kingdom over the last twelve months exceed SAR 375,000. It must also register when it expects its supplies over the next twelve months to exceed that amount, for example after signing a large contract.

• The check is made at the end of each month, looking back twelve months and forward twelve months.
• Exempt supplies are not taxable supplies, so they do not count towards the threshold.
• A non-resident that must pay VAT in the Kingdom registers within 30 days of its first such supply, whatever its value.

When registration is voluntary

A resident business whose taxable supplies, or taxable expenses, over twelve months exceed SAR 187,500 may register without being obliged to. Registering lets it deduct the VAT it pays on its purchases, which matters for a new business spending before it sells. Below SAR 187,500 a business cannot register.

The 30-day deadline and the fine

The application is due within 30 days of the end of the month in which the threshold was crossed, or in which the expectation arose. If a business does not apply, ZATCA may register it on its own, from the date it should have been registered. ZATCA's table of fines sets SAR 10,000 for failing to register within the period, and VAT that should have been charged from that date is still due.

How to apply

The application is made in ZATCA's e-services portal, in the VAT section, by the business's account holder. Once it is accepted the business receives its VAT registration certificate and its VAT number: 15 digits, starting and ending with 3. From that date it charges VAT on its taxable supplies, issues tax invoices and files a return for every period.

How Aqid ERP uses the VAT number

The company's VAT number is entered once, in the company's settings, and printed on every tax invoice. Before the company is connected to ZATCA for Phase 2, Aqid ERP checks its form: 15 digits, starting and ending with 3. A Saudi customer's VAT number is checked the same way when it is saved, and a mistyped one is refused, so a standard tax invoice does not go out with it.