Saudi Arabia amends the VAT implementing regulations

On 18 April 2025, Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) published amendments to the VAT Implementing Regulations. Key changes include stricter VAT group formation criteria, new deemed supplier rules for electronic marketplaces, and revised foreign VAT refund procedures. Notably, VAT grouping now requires each member to independently qualify for VAT registration, and certain entities (e.g., those in special economic zones) are excluded. Electronic marketplaces may be deemed suppliers under specific conditions, making them responsible for VAT collection on behalf of unregistered sellers. Refund thresholds have increased, and documentation requirements have expanded. While most changes are effective immediately, VAT grouping rules apply from 15 October 2025, and deemed supplier provisions from 1 January 2026.

Key takeaway

Businesses in KSA should assess the impact of these changes on their VAT compliance and group structures. Consulting with tax advisors is recommended to navigate the new rules and ensure timely adaptation.

Reference

• Decision No. (01-06-24) of ZATCA’s Board of Directors