Saudi Arabia digital services VAT 2018

Sun 17th Dec 2017

The Saudi Arabian tax office, GAZT, has confirmed that the supply of digital services by non-resident providers to consumers will be subject to the new VAT regime from 1 January 2018.  This will require foreign providers of digital services to VAT register if they are over the VAT registration threshold of SR1,000,000.  However, if the services are provided via online platforms activing as the intermediary, then the platform is regarded as the principle, and therefore liable to account for the VAT.

Electronic services subject to the new indirect tax include: software, e-subscriptions, mobile applications, and digital content.

Services to VAT registered business in the Kingdom will be nil rated under the reverse charge reporting mechanism.

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