Effective April 18, 2025, the Zakat, Tax and Customs Authority (ZATCA) has implemented a VAT refund system for tourists. This initiative allows non-resident visitors to reclaim the 15% Value Added Tax (VAT) paid on eligible goods and services purchased within Saudi Arabia. The refund is processed at the point of departure, aiming to boost tourism and align with the Kingdom's Vision 2030 objectives.

Overview of the New VAT Refund Scheme

Tourists can claim a refund on the VAT they paid during their stay, making Saudi Arabia a more attractive destination for international travelers. This strategic policy aligns with the Kingdom’s ongoing economic diversification plan.

Eligibility Criteria for Tourists

• Non-Residency: The individual must not be a resident of Saudi Arabia or any Gulf Cooperation Council (GCC) country.
• Eligible Goods: Purchases must be for personal use and exported from the Kingdom. Items like food, fuel, and some personal goods are excluded. (Source)
• Minimum Purchase Amount: Tourists must spend a minimum of SAR 5,000 to qualify. (Source)
• Timeframe for Refund Claim: Refunds must be requested within six months of the purchase date. (Source)

Role of Authorized Service Providers

ZATCA will appoint approved service providers responsible for facilitating VAT refunds. These providers will:

• Verify tourist eligibility and purchase details
• Process refund transactions at exit points (e.g., airports)
• Maintain proper documentation for auditing and compliance

Both tourists and service providers are liable for violations and improper refund claims. (Source)

Implications for GCC Tourists

Until the Electronic Service Law is implemented, tourists from GCC countries will be considered foreign tourists for VAT refund purposes, enabling them to benefit from this new scheme. (Source)

Additional VAT Regulation Amendments

• Economic Activity Transfers: The transferee must notify ZATCA within 30 days unless the transferor has deregistered.

• Record Retention: Even after deregistration, former taxable persons must retain invoices, notices, books, and records.

• Non-Compliance: If conditions for transferring an economic activity are not met, the transfer may be taxed. (Source)