Zakat, Tax and Customs Authority clarifies VAT registration rules for businesses earning under 200,000 riyals
Saudi Arabia’s Zakat, Tax and Customs Authority says VAT registration is mandatory for annual revenues above 375,000 riyals, optional above 187,500 riyals.
Key Takeaways
AIThe Zakat, Tax and Customs Authority has clarified the rules for registering under the Value Added Tax (VAT) system, responding to a query about whether a new company with an expected annual income not exceeding 200,000 riyals can register and obtain a tax number.
The question, submitted via the Authority’s “Ask Zakat, Tax and Customs” account on the X platform, read: “I have a new company and want to register for VAT, but the expected income will not exceed 200,000 riyals in the coming years. Can I obtain a tax number?”
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The Authority stated that any entity conducting economic activity must register for VAT if its annual revenues reach the mandatory threshold of 375,000 riyals.
It added that those with annual revenues exceeding 187,500 riyals but not more than 375,000 riyals are eligible for voluntary VAT registration.
For entities with annual revenues below 187,500 riyals, the Authority confirmed they are not eligible to register for VAT.