How to reclaim VAT in Saudi Arabia? Your comprehensive guide

If you paid more VAT than required, or if you are a traveler visiting Saudi Arabia, you have the right to reclaim the tax. In this article, we explain everything about VAT refunds, their conditions, and how to submit your application.

Where can you reclaim the tax?

The VAT system in Saudi Arabia allows tax refunds in 3 main cases:

1. For companies registered in VAT
If your company is registered in VAT and you pay tax on your purchases (input tax), you can deduct it from your sales tax (output tax). If the input tax is higher than the output tax, you can request the difference from the Zakat, Tax and Customs Authority (ZATCA).

Example: If you bought goods for 100,000 SAR + 15% tax (15,000 SAR) and sold them for 120,000 SAR + tax (18,000 SAR), the difference of 3,000 SAR is paid to the authority. However, if you did not sell anything, you can reclaim the full 15,000 SAR.

2. For individuals (non-registered)
If you are an ordinary individual not registered in VAT, you can reclaim tax in certain cases such as:

  • Building your first home (forever home) – reclaim tax on materials and contractors
  • Importing a personal car from abroad
  • If you paid tax by mistake or in excess

3. For tourists and visitors (Tax Free)
If you are a visitor to Saudi Arabia and not a resident, you can reclaim VAT on your purchases. Conditions:

  • Minimum purchase amount: 300 Saudi Riyals (before tax)
  • Purchases must be from stores participating in the Tax Free program
  • You must leave Saudi Arabia within 90 days of the purchase date
  • Submit the refund request at the exit point (airport, land crossing, port)
  • Administrative fee of approximately 15% of the tax amount

How to submit a tax refund application?

For companies: Through your account on the ZATCA e-portal (zatca.gov.sa). Submit your periodic tax return, and if you have a credit balance, submit an electronic refund request. The authority reviews the application and disburses the amount within 60 days (or less).

For individuals: Submit an application via the e-portal or through the ZATCA app. You must attach invoices and documents that prove your entitlement to the refund.

For tourists: At designated exit points. Submit invoices, passport, and entry visa, and receive the amount in cash or on your card.

Frequently asked questions about VAT refunds

Q: How long does ZATCA take to refund tax for companies?
A: The standard period is 60 days from the date of application submission. However, in some cases, it may be faster.

Q: Can I reclaim VAT on personal purchases?
A: If you are registered in VAT, personal purchases are not eligible for tax refunds. Refunds are only allowed for commercial purchases.

Q: What is the difference between input tax deduction and tax refund?
A: Deduction means subtracting your purchase tax from your sales tax in the return. A refund is receiving a cash amount from the authority when your input tax exceeds your output tax.

Q: Can tourists reclaim tax on all purchases?
A: No, some goods are excluded, such as cars, vehicles, and food items purchased for personal consumption.

Q: How do I know if a store participates in the Tax Free program?
A: Participating stores will have a clear “Tax Free for Tourists” sign. You can also verify through the ZATCA app.

VAT refunds are a legal right for any individual or company that paid more tax than required. The key is to know the conditions and procedures so you do not lose your right. If you have any inquiries, you can contact ZATCA at the unified number 19993 or visit their website zatca.gov.sa.