VAT Compliance in Saudi Arabia is governed by ZATCA and applies to businesses involved in taxable transactions. Key points include:

1. VAT Registration:
   • Mandatory if taxable supplies exceed SAR 375,000 annually.
   • Voluntary for businesses below the threshold.
2. Issuing VAT-Compliant Invoices:
   • Must include VAT registration numbers, invoice number/date, total amount, VAT amount, and VAT rate.
   • E-invoicing: Required since December 2021 (XML/PDF format) with integration into ZATCA’s platform by January 2023.
3. VAT Returns:
   • Filed monthly or quarterly via ZATCA's portal, including sales, purchases, VAT collected/paid.
4. Payment of VAT:
   • Must be paid by the due date after filing returns. Late payments incur penalties.
5. Record Keeping:
   • Maintain sales, purchase, and invoice records for at least 5 years.
6. VAT Refunds:
   • Available for eligible business purchases, via ZATCA’s portal.
7. Zakat & Income Tax:
   • Zakat for Saudi businesses, income tax for non-Saudis, both filed with ZATCA.
8. Penalties for Non-Compliance:
   • Fines for late filings, incorrect invoices, or failure to register. ZATCA may conduct audits.
9. VAT Exemptions/Zero-Rating:
   • Certain goods/services are exempt or subject to 0% VAT (e.g., food, healthcare).
10. Cross-Border VAT Compliance:

• Businesses involved in imports/exports must follow customs and VAT regulations. Exports are generally zero-rated.