Saudi VAT Registration Threshold 2026: SAR 375,000 Rule Explained

Updated 6 October 2026. One of the most important VAT questions for Saudi businesses and self-employed individuals is whether registration with ZATCA is mandatory or voluntary. The threshold rules are straightforward in principle, but taxable supplies, exempt supplies and non-resident rules can change the answer.

What is the mandatory VAT registration threshold in Saudi Arabia?

ZATCA states that a resident person carrying on an economic activity must generally register for VAT when annual taxable supplies exceed SAR 375,000. The test can look at the previous 12 months and, in relevant cases, whether taxable supplies are expected to exceed the threshold during the next 12 months.

What is the voluntary VAT registration threshold?

Eligible resident persons may voluntarily register when taxable supplies or taxable expenses exceed SAR 187,500 during the relevant period, even though mandatory registration has not yet been reached.

Does every type of revenue count toward the threshold?

No. ZATCA guidance explains that the mandatory threshold test focuses on taxable supplies. Exempt supplies, supplies outside the scope of VAT and revenue from the sale of capital assets are not treated the same way for the threshold calculation. Because classification matters, businesses should not simply use total bank deposits or total accounting revenue as a substitute for a proper VAT review.

What about non-resident businesses?

ZATCA’s guidance contains separate rules for non-residents. A non-resident that is required to pay Saudi VAT on supplies can be subject to mandatory registration without relying on the normal SAR 375,000 resident threshold. Cross-border businesses should therefore review their Saudi VAT position before assuming they are below the threshold.

Practical checklist before registering

• Calculate taxable supplies for the previous 12 months.
• Prepare a reasonable projection for the next 12 months.
• Separate exempt and out-of-scope transactions from taxable supplies.
• Check whether the business is resident or non-resident for the relevant VAT rule.
• Keep sales records and supporting invoices.
• Use ZATCA’s official portal for the actual registration process.

Official Saudi source

See ZATCA’s VAT Registration for Individuals service and the authority’s VAT guidance. ZATCA currently states that annual revenues over SAR 375,000 trigger mandatory registration for the covered service, while registration is optional for eligible persons above SAR 187,500 and below SAR 375,000.

Related Saudi tools

Use the SMCE Saudi VAT amount calculator for arithmetic only. It does not determine whether your business must register or whether a transaction is taxable.