Tourists visiting Saudi Arabia will now be eligible for a refund on the 15 percent value added tax (VAT) they pay on goods and services during their stay, following amendments introduced by the Zakat, Tax and Customs Authority (ZATCA). The changes to the VAT Regulation came into effect on Friday, April 18, as reported by the Saudi Gazette.
Under the revised regulation, VAT will be charged at zero percent on eligible purchases made by tourists from approved service providers. The amount initially paid as VAT will be refunded when the tourist exits the Kingdom. This move is part of Saudi Arabia’s broader efforts to align its tax practices with international standards and enhance the overall tourism experience.
ZATCA stated that approved service providers would facilitate the refund process and are authorised to issue tax refunds at the time of departure. These providers will operate under the authority’s oversight and be jointly responsible with the tourist for repaying any refunds issued incorrectly or in violation of established procedures.
Tourists from Gulf Cooperation Council (GCC) countries will also be treated as non-GCC tourists for the purpose of VAT refunds until the Electronic Services Law is implemented.
The authority’s governor has been granted powers to issue detailed guidelines outlining eligibility criteria, implementation procedures, and thresholds for refunds. These include the definition of who qualifies as a tourist, the types of goods eligible for refunds, the minimum purchase value, and the process for becoming an approved taxable supplier. Suppliers wishing to participate in the refund scheme must meet these conditions and follow the procedures outlined by ZATCA.
This development come as Saudi Arabia continues to refine its tax framework amid ongoing economic reforms under Vision 2030, which include boosting tourism and streamlining regulations to attract international visitors and investors.
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