How it is calculated
Gross = Net × 1.15 Net = Gross ÷ 1.15 VAT = Gross × 15 ÷ 115Saudi Arabia’s standard VAT rate has been 15% since July 2020, administered by ZATCA, with zero-rating for some supplies such as exports and international transport, and exemptions such as some financial services and residential rent.
Worked example
A 200 SAR net price: VAT = 30, gross = 230 SAR. A 1,150 SAR VAT-inclusive invoice: VAT = 1,150 × 15 ÷ 115 = 150 SAR.
Frequently asked questions
Why not multiply the gross by 15%?
Because 15% applies to the net price. To extract it from the gross, multiply by 15 and divide by 115.
When must a business register?
Mandatory above SAR 375,000 of annual supplies; voluntary from SAR 187,500.
Is e-invoicing mandatory?
Yes, e-invoicing (Fatoora) applies to taxable businesses in phases.
Rules last checked: 2026-10