Importing goods and services: import VAT and the reverse charge

Buying from abroad doesn't take you outside VAT — the tax is simply collected differently.

Importing goods

VAT of 15% is due at customs on the import value plus customs duty. Keep the customs declaration: it is your evidence for deducting that VAT as input tax.

Importing services: the reverse charge

When a registered business buys a service from a supplier outside the Kingdom, the foreign supplier doesn't charge Saudi VAT. Instead, you account for it yourself:

1. 1Calculate 15% VAT on the service value.
2. 2Report it as output VAT in your return.
3. 3Deduct the same amount as input VAT, if the service is used for taxable supplies.

For a fully taxable business, the net effect is zero — but the reverse charge must still appear in the return.

Watch out

• Software subscriptions, consulting and marketing services from abroad are common examples.
• The same payment may also be subject to withholding tax.
• Missing reverse-charge entries are a frequent inspection finding.