Under a new exemption policy that came into effect on April 18, tourists visiting Saudi Arabia will now be eligible for refunds on the 15% Value Added Tax (VAT) paid on goods and services during their stay. The Zakat, Tax and Customs Authority (ZATCA) announced a set of amendments to the VAT Regulations aimed at facilitating tax refunds for international visitors, including the Saudi Arabia tourist VAT refund process.
Under the updated rules, qualifying tourist purchases made through approved service providers will be subject to a zero per cent VAT rate. Tourists will be refunded the VAT they initially paid upon departure from Saudi Arabia, which is part of the Saudi Arabia tourist VAT initiative.
ZATCA will authorise specific service providers to oversee and process these refunds. According to the Saudi Gazette, both tourists and these approved providers will be held accountable for any improperly claimed refunds related to the Saudi Arabia tourist VAT.
Until the Electronic Service Law is formally implemented, tourists from other Gulf Cooperation Council (GCC) countries will be treated the same as international tourists for VAT refund purposes.
ZATCA’s governor has been given authority to issue detailed guidelines outlining the mechanics of the refund system. These guidelines will include eligibility requirements for tourists, minimum purchase thresholds, types of refundable goods, application procedures, and standards for businesses to qualify as approved refund facilitators.
In a separate update, ZATCA also clarified procedures regarding the transfer of economic activities. Businesses must notify the authority within 30 days of transferring operations to another entity—unless the business has already deregistered for VAT. The revised rules stress that VAT deregistration does not exempt businesses from maintaining records or meeting outstanding tax obligations.
Moreover, if a business fails to comply with transfer regulations—such as notifying ZATCA—the goods and services involved may be treated as taxable.
The new measures are part of Saudi Arabia’s broader efforts to boost tourism and streamline tax compliance across sectors.
