Tax in Saudi Arabia: VAT, income tax, company tax, capital gains

VAT in Saudi Arabia

GCC value-added model with mandatory e-invoicing (FATOORAH).

Standard rate

15%

Local name

VAT — Value Added Tax

Type

VAT

Reduced rates

None on record

Registration threshold

SAR 375,000 (mandatory)

Filing

Monthly or quarterly

Authority

Zakat, Tax and Customs Authority

Current rate since

1 January 2000

Company tax in Saudi Arabia

The headline corporate income tax rate is 20%. In effect since 1 January 2026.

Indicative only: confirm with Saudi Arabia's national tax authority. OECD 2026: central statutory CIT 20%, combined (central+sub-central) 20%

Saudi Arabia company tax calculator →

Did you know? Saudi Arabia tax facts

• Saudi Arabia tripled its VAT rate from 5% to 15% on 1 July 2020 — one of the steepest single VAT jumps any major economy has made.

  The hike was announced on 11 May 2020 to shore up state finances as COVID-19 and collapsing oil prices battered the budget; it took effect on 1 July 2020.

  Source: Deloitte Middle East ↗

• Crown Prince Mohammed bin Salman publicly called the 15% VAT a 'painful measure' and promised it was temporary — targeted to fall back to 5–10% within one to five years.

  In a televised Vision 2030 fifth-anniversary interview in late April 2021 he said it was 'painful for me personally,' that it would last 'a year, maximum five years,' and that the target was 'between 5 to 10 percent.' The rate has nonetheless stayed at 15% ever since.

  Source: Arab News (full interview transcript) ↗

• Saudis lost a perk and gained a tax in the same breath: the same May 2020 package that tripled VAT also suspended the 1,000-riyal monthly cost-of-living allowance paid to state workers.

  VAT rose from 1 July 2020 while the allowance was suspended from 1 June 2020, together part of roughly 100 billion riyals of austerity measures affecting about 1.5 million state employees.

  Source: Gulf News ↗

• Just months after tripling VAT, Saudi Arabia pulled property sales out of the VAT system entirely — exempting real estate from the 15% VAT and replacing it with a separate 5% Real Estate Transaction Tax.

  A Royal Decree of October 2020 created RETT; all real estate transactions after 4 October 2020 became VAT-exempt and subject instead to 5% RETT, cutting the tax on a home transfer from 15% to 5% to protect the property market.

  Source: EY Global Tax Alert ↗

• Every B2C receipt in Saudi Arabia must now carry a cryptographically-stamped QR code, and businesses report the sale to a government platform called 'Fatoora' within 24 hours of issuing the invoice.

  ZATCA's mandatory e-invoicing system (Phase 1 'Generation' from 4 December 2021, real-time Phase 2 'Integration' rolled out in waves from 1 January 2023) makes QR codes compulsory on simplified invoices so the VAT can be verified on the spot.

  Source: ZATCA (Zakat, Tax and Customs Authority) roll-out phases ↗

• Saudi Arabia is one of six Muslim-majority countries where zakat — the Islamic alms levy, customarily 2.5% of capital assets — is obligatory and collected by the state, and income itself is subject to zakat there.

  Wikipedia: Saudi Arabia is listed among six countries where 'zakat is obligatory and collected by the state' (its status shown as 'Mandatory', as of 2015); 'Income is subject to zakat in Saudi Arabia and Malaysia'; the customary rate on capital assets is 2.5% (one-fortieth).

  Source: Wikipedia — Zakat · checked 10 October 2026 ↗

More stories, for every country that has one, on the tax facts page.