HomeZakat and VAT certificate

Navigating Saudi Arabia’s tax landscape presents a challenge, especially for businesses deciphering whether they’re subject to Corporate Income Tax (CIT) or Zakat. This piece aims to demystify the criteria distinguishing Zakat from Corporate Tax, offering businesses clarity in their operations within the Kingdom.

Zakat and VAT

The government collects Zakat, a mandatory Islamic charitable contribution in Saudi Arabia, to support the less privileged. A consumption tax applied to the value added at every stage of manufacturing and distribution is called value added tax, or VAT. Businesses collect and remit VAT, contributing to government revenue. Introduced in January 2018 at a 5% rate on taxable supplies and imports, aids government revenue through business collection. Amid the COVID-19 pandemic, a May 11, 2020, decree from the Zakat, Tax, and Customs Authority raised the VAT rate to 15% starting July 1, 2020.

Registration with Zakat 
  • Access the Ministry of Commerce Registration portal and sign in. 
  • Navigate to the ZATCA Portal 
  • Fill out the form
  • Upon submission, you’ll receive a confirmation notification.
To be eligible for Zakat, corporations must satisfy the following criteria
  • Zakat eligibility is contingent upon specific criteria, including exclusive ownership by Saudi or GCC nationals. 
  • The business must be a legal entity, encompassing structures like joint stock companies, limited liability companies, or partnerships.
Steps to acquire VAT certificate in KSA

Step 1: Access the ZATCA Portal.

Step 2: Navigate to relevant services.

Step 3: Complete the Registration Form.

Step 4: Await Notification from ZATCA.

Step 5: Receive VAT Certificate 

Categorized goods that incur no VAT, with a tax rate of 0%

Supplies eligible for a 0% VAT rate in the Kingdom of Saudi Arabia (KSA) are those for which the supplier is VAT registered. The following categories qualify for this rate:

  • Exported Goods: Goods intended for delivery outside the KSA.
  • Services Rendered to Non-GCC Residents: Services provided to individuals or entities outside the Gulf Cooperation Council (GCC) region.
  • Supply of Qualifying Means of Transport: The provision of eligible transportation methods.
  • International Goods and Passenger Transport Services: Involves the movement of goods and passengers across international borders.
  • First Supply or Supply for Investment of Qualifying Metals: Initial transactions or transactions related to investment involving gold, silver, or platinum.
  • Qualifying Medicines and Qualifying Medical Goods: Includes approved medications and medical supplies meeting specific criteria.

A 15% value-added tax applies to all goods and services except exempt supplies and those classified as zero-rated supplies.

Rely on Helpline Group – Easily acquire your Zakat and VAT Certificates

Helpline Group is your reliable business consultant in Saudi Arabia, offering expert guidance for obtaining Zakat and VAT certificates. With a history of 25 years, we take pride in achieving customer satisfaction among our clients. Boasting a global presence, we operate through 10 international branches and employ over 300 industry experts.