There is no registration threshold for non-resident suppliers.
The supply of services by a non-resident entity carrying out economic activities from a place of business in Saudi Arabia is subject to VAT and the non-resident entity is required to register for VAT purposes and may appoint a tax representative to comply with the VAT obligations. Effective 18 July 2019, a non-resident entity may choose not to appoint a tax representative by providing a guarantee for an amount determined by the Zakat, Tax and Customs Authority.
The supply of services by a non-resident entity without a place of business to any VAT-registered payer (B2B) in Saudi Arabia is subject to a reverse charge VAT in the hands of the service recipient. This includes supplies from residents of any of the GCC Member States (until the implementation of the electronic services system in all Member States).
Following services are outside the scope of reverse charge mechanism:
- Receipt of exempt services (e.g. financial services received from a non-resident person); and
- Specified services (viz. leasing means of transport, supply of real estate services etc.) as outlined in the GCC Unified VAT Agreement.
Non-resident entities without a place of business in Saudi Arabia providing services to a non-taxable person in Saudi Arabia (B2C) are required to register for VAT and discharge VAT obligations.
Saudi Arabia's Zakat, Tax and Customs Authority have published a VAT guide to provide clarifications on the application of VAT in relation to the electronic commerce (e-commerce). A non-resident entity without a place of business in Saudi Arabia providing electronic services to a non-VAT-registered customer in Saudi Arabia (B2C) is required to register for VAT.
In case of supply of electronic services to VAT-registered customer (B2B), the VAT is payable by the customer on a reverse charge basis.
For supplies made through an online platform, the platform operator is generally responsible for VAT, subject to certain exceptions.
E-commerce refers to the buying and selling of services via a website, electronic platform, social media store or an application, and the transfer of money and data to complete the sales.
An online platform refers to an electronic website, electronic marketplace, forum or similar application which facilitates the sale of goods or services from a supplier to a customer and allows a transaction to be completed through it.
Electronic services include:
- Any service relating to the transmission, emission or reception of signals, writing, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems;
- Transfer or assignment of the right to use capacity for such transmission, emission or reception;
- Provision of access to global information networks;
- Provision of audio and audio-visual content for listening or viewing by the general public on the basis of a program schedule by a person that has editorial responsibility;
- Live streaming via the internet;
- Supplies of images or text provided electronically, such as photos, screensavers, electronic books and other digitised documents or files;
- Supplies of music, films and games, and of programs on demand;
- Online magazines;
- Website Supply or web hosting services;
- Online maintenance of programs and equipment;
- Supplies of software and software updates; and
- Advertising space on a website and any rights associated with such advertising.