Saudi Arabia's VAT Refund Scheme: A Hidden Profit Opportunity

Since the introduction of VAT in Saudi Arabia in 2018, the Zakat, Tax and Customs Authority (ZATCA) has steadily expanded its scope and digital capabilities. With the VAT rate set at 15%, businesses are now more aware of their obligations  but many still overlook the opportunities. Among the most underutilized is the VAT refund in Saudi Arabia, which can transform routine expenses into direct financial gains. This blog explores how vat services in Saudi Arabia can help businesses turn compliance into profit.

The Current Landscape of VAT in Saudi Arabia

VAT Rate: 15%, applicable to most goods and services.

Key Obligations:

• VAT registration with ZATCA
• Timely vat submission in Saudi Arabia
• Issuing compliant invoices
• Electronic filing via ZATCA’s portal

Recent Update: Businesses can now reclaim VAT on Accounts Payable (AP) expenses, including travel, tooling, and supplier invoices — a shift that opens new refund avenues.

Why Firms Miss Out:

• Limited awareness of refund eligibility
• Complex documentation requirements
• Manual processes and lack of automation
   

Hidden Profit via VAT Refund in Saudi Arabia

What’s reclaimable?

• Travel and hospitality costs
• Supplier invoices
• Cross-border services
• Advertising and tooling expenses

Special Case: Donors to public benefit projects (e.g., mosques, health centres, schools) can reclaim VAT if:

• The project is fully donated to a competent authority
• The donor registers with ZATCA as an “Eligible Person”
• Refunds are claimed within six months of the calendar year-end

Financial Impact:

• Reclaimed VAT = Direct cost savings
• Improved cash flow
• Enhanced profit margins

This isn’t just compliance  it’s a strategic financial tool when guided by expert vat services in Saudi Arabia. 

How to Make the Most of the Scheme  Step by Step?

• Assess Expenses: Review travel, tooling, supplier invoices, and advertising for refund eligibility.
• Invoice Compliance: Ensure invoices meet ZATCA’s standards  supplier name, tax ID, invoice number, tax amount, and description.
• Engage Experts: Use professional vat services in Saudi Arabia for consultancy, audit, and automated tracking.
• Act Fast: For donors, the refund deadline is six months after year-end. Refunds from 2018–2023 must be filed by June 30, 2025.
• Plan Ahead: Integrate VAT refund strategy into broader tax planning and monitor compliance regularly.
   

Why You Need Expert VAT Submission Support?

Expertise Matters:

• Navigating ZATCA’s evolving rules
• Avoiding errors in vat submission in Saudi Arabia
• Handling e-filing and documentation
   

Benefits of Professional Support:

• Identifying missed refund opportunities
• Digitising and automating the reclaim process
• Managing cross-border VAT complexities

Don’t operate in silos. Align your finance, procurement, and tax teams to maximise refund success.

Conclusion

Saudi Arabia’s VAT refund scheme is more than a regulatory checkbox  it’s a hidden profit opportunity. With the right support, businesses can reclaim millions in overlooked expenses. Reyson Badger, a trusted provider of vat services in Saudi Arabia, helps clients navigate this landscape with precision, ensuring compliance while unlocking financial value.

Ready to turn your VAT compliance into profit? Let Reyson Badger guide your next refund strategy.