Introduction
With the rapid growth of e-commerce in the Kingdom of Saudi Arabia, the Zakat, Tax and Customs Authority (ZATCA) has increased its focus on regulating and monitoring the digital sector. If you own an online store or sell through platforms like Amazon and Noon, you are obligated to understand your tax obligations.
In this guide, we provide you with everything you need to know about the Value Added Tax (VAT) for e-commerce in Saudi Arabia for the year 2026.
Is e-commerce subject to Value Added Tax?
Yes, absolutely. A Value Added Tax of 15% applies to all e-commerce sales in Saudi Arabia, whether you sell through your own store or through sales platforms. There is no difference between a physical store and an online store in the eyes of ZATCA.
VAT registration threshold
If your annual revenue from electronic sales is:
- More than 375,000 SAR: Registration is mandatory; you must register for VAT immediately.
- Between 187,500 SAR and 375,000 SAR: Registration is optional, but it is preferable to register to reclaim input tax.
- Less than 187,500 SAR: Not required to register, but you can register voluntarily.
“Deemed Supplier” rule — what matters to store owners
Starting January 2026, ZATCA has implemented new rules for electronic platforms such as Amazon and Noon. Under these rules, the electronic platform may be considered the “supplier” of the goods and services sold through it and bears responsibility for collecting VAT, issuing tax invoices, and filing returns with the authority.
- The platform is responsible for issuing a tax invoice on behalf of the merchant.
- The platform bears responsibility for collecting the tax and remitting it to ZATCA.
- Small merchants may not need to register for tax if their platforms handle tax on their behalf.
Electronic invoice (Fatoora) — a must
If you are registered for VAT, you are obligated to issue electronic invoices compliant with the Fatoora system. Wave 24 ended on June 30, 2026, and includes establishments with revenue exceeding 375,000 SAR. Ensure that your e-commerce system is integrated with the Fatoora platform.
Your obligations as an e-commerce store owner
- VAT registration — if you exceed the required threshold.
- Issuing electronic invoices — for every e-commerce sale.
- Submitting tax returns — quarterly or monthly depending on business size.
- Applying the Fatoora system — linking with the ZATCA platform.
- Keeping records — for at least 6 years.
What if the seller is an individual and not a company?
Even individuals who sell through platforms such as Instagram or personal stores are obligated to register for VAT if their annual sales exceed 375,000 SAR. There are no exemptions for individuals in this regard.
Importing via e-commerce
When importing goods via express shipping (such as DHL or FedEx) to sell online, customs imposes a 15% VAT on the value of the goods plus shipping and insurance fees. You can reclaim this VAT if you are registered for VAT and sell taxable goods.
Digital services — what about subscriptions and services?
Digital services such as software and electronic subscriptions are also subject to a 15% VAT.
Frequently Asked Questions
Do I need to register for VAT if I only sell through Instagram?
Yes, if your annual sales exceed 375,000 SAR. The method by which you sell does not matter — what matters is the volume of revenue.
Does Amazon bear responsibility for my tax?
According to the new “Deemed Supplier” rules (January 2026), Amazon and similar platforms may bear responsibility for collecting tax on behalf of merchants in some cases.
How often should I submit a VAT return?
If your annual revenue is less than 40 million riyals, you must submit a quarterly return. If it exceeds 40 million riyals, the return must be submitted monthly.
Are goods imported for e-commerce subject to tax?
Yes, customs imposes a 15% VAT at the time of import, but you can reclaim it as input tax.
What is the difference between VAT and Zakat for an e-commerce trader?
VAT (15%) is imposed on every sale and collected from the customer. Zakat, on the other hand, is a religious obligation calculated annually on assets.
Summary
The e-commerce market in Saudi Arabia is meticulously regulated by ZATCA. Understanding your tax obligations protects you from penalties and helps you grow transparently.
To register for VAT or submit your return, visit the Zakat, Tax and Customs Authority website: zatca.gov.sa.
