Saudi Arabia Introduces Sweeping Changes to VAT Executive Regulations
On April 18, 2025, the Zakat, Tax and Customs Authority (ZATCA) published Board Resolution No. 01-06-24 in the Official Gazette, marking one of the most significant overhauls to Saudi Arabia’s VAT Implementing Regulations since their inception.
What’s Changing?
The newly approved amendments are wide-ranging and touch on nearly every aspect of VAT compliance. Among the most notable updates are:
- Stricter criteria for VAT group formation, potentially limiting which entities can consolidate for VAT purposes.
- Revised rules concerning the cessation of economic activities, nominal supplies, and transfers of going concern.
- Clarified VAT treatment for:
- Special economic zones
- Cross-border services to non-GCC residents
- Government grants and subsidies
- Financing agreements
- Online platforms and marketplaces
- A harmonized timeline for the issuance of credit and debit notes, now required within 15 days after the month following the triggering event—mirroring the rules for tax invoices.
What Does This Mean for Businesses?
While these regulatory updates do not directly alter e-invoicing procedures, they could have substantial implications for VAT reporting, contract structuring, and tax compliance frameworks. ZATCA urges all businesses operating in the Kingdom, along with their tax advisors, to conduct a comprehensive review of the amendments to assess potential operational and strategic impacts.
There’s more you should know about e-invoicing in Saudi Arabia – learn more about the new and upcoming regulations.
