Zakat, Tax and Customs Authority clarifies VAT registration for incomes below 375,000 riyals
Saudi Arabia’s Zakat, Tax and Customs Authority explains VAT registration rules for businesses earning less than 375,000 riyals annually.
Key Takeaways
AIA question was submitted to the Zakat, Tax and Customs Authority by a follower, asking: "Greetings, is VAT registration required next February for those with income below 375,000 riyals?"
The authority, via its 'Ask Zakat, Tax and Customs' account on X, clarified that anyone conducting economic activity must register for VAT if their annual revenue reaches 375,000 riyals (SAR) or more.
It added that businesses with annual revenues between 187,500 and 375,000 riyals are eligible for voluntary registration, while those with less than 187,500 riyals in annual revenue are not eligible to register for VAT.
View the post on X
The authority explained that for new businesses, the mandatory registration threshold is calculated based on taxable sales expected over the next twelve months. Registration must be completed within 30 days of reaching the mandatory threshold.
It added: "Documents proving eligibility for VAT registration include a statement of the business’s revenue over the previous twelve months and a bank statement for the same period. If these cannot be provided, a letter requesting VAT registration for the business may be attached."