Value Added Tax (VAT)

When Does VAT Apply to Companies?

VAT applies when a company’s annual revenue crosses a certain threshold established by local authorities. In Saudi Arabia, registration for VAT becomes mandatory once a business earns more than SAR 375,000 annually. Even companies with revenues above SAR 187,500 may opt for voluntary registration, which can offer strategic advantages such as input tax deductions.

Understanding Your VAT Responsibilities

Navigating VAT isn’t just about charging 15%—it involves several layers of responsibility:

• Tax Registration: Businesses that exceed the threshold must register with ZATCA and obtain a VAT account number.
• Tax Calculation: VAT is charged at every stage in the supply chain—from raw material purchases to final product sales. While consumers ultimately pay the tax, companies are responsible for collecting and remitting it.
• Tax Compliance: Registered companies must maintain accurate financial records, file returns on time, and ensure their invoices meet regulatory requirements.

Why Work with VAT Experts?

VAT regulations are detailed and often subject to updates. Small and medium-sized businesses, in particular, may lack the internal expertise to manage compliance effectively. That’s where professional support makes all the difference.

Our accounting and tax advisors at ERAD handle everything from VAT registration and invoicing to audit support and monthly filings. We help you avoid costly mistakes, reduce the risk of fines, and ensure your business stays in line with Saudi tax law—without unnecessary stress.

Partner with ERAD Because Compliance Shouldn’t Be a Burden

With ERAD by your side, you gain more than just technical expertise. You gain peace of mind. Let us handle the paperwork and policies while you build and grow your business. We’re here to make sure VAT compliance is one less thing on your to-do list.