Saudi VAT key facts: 15% rate, registration, returns and penalties

Country reference

• Country: Saudi Arabia (Wave 1 expansion country)
• Authorities: Zakat, Tax and Customs Authority (ZATCA)
• Topic: Value added tax: rate, registration, returns and e-invoicing
• Key date: Q3 2026 and September 2026 returns due by 31 October 2026
• Law: VAT Law and its Implementing Regulations

Key facts

• Standard rate: 15%.
• Registration: mandatory where taxable supplies exceed SAR 375,000 a year; voluntary above SAR 187,500.
• Monthly returns: for businesses with annual supplies above SAR 40 million.
• Quarterly returns: for businesses with annual supplies of SAR 40 million or less.
• Deadline: the last day of the month after the period. ZATCA set 31 July 2026 for the second quarter of 2026.

Penalties

• Late filing: 5% to 25% of the tax that should have been declared, according to ZATCA.
• Late payment: an additional penalty applies for each month or part of a month the tax stays unpaid.
• Old late-filing and late-payment fines may be cancelled under ZATCA’s fines initiative until 31 December 2026, but only for returns due by 30 June 2026.

E-invoicing

Invoices must be generated electronically (Phase One) and, for businesses called in waves, integrated with ZATCA’s Fatoora platform (Phase Two). Wave 25 covers VAT-subject revenue above SAR 187,500 in any year from 2022 to 2025, with integration due by 1 February 2027.

What to do now

• Diarise 31 October 2026 for the September and third-quarter returns.
• Reconcile output VAT with e-invoices reported to Fatoora before filing.
• Check whether the business falls into Wave 25 and start integration testing.

Our take

With e-invoicing, ZATCA sees much of a business’s sales data before the return arrives. Returns that do not match Fatoora data are an obvious audit trigger, so reconcile every period.