Saudi Arabia: Proposed application of zero VAT rate to “export” of services

Public discussion of the draft scheduled to begin 11 November 2022

“Export” of services

The Zakat, Tax and Customs Authority (ZATCA) published draft legislation that suggests changes to Article 33 of the value added tax (VAT) regulations, including an additional rule for applying a zero VAT rate to the “export” of services.

The new clause suggests that the supply of services to a customer without a place of residence in any Gulf Cooperation Council (GCC) Member State (currently any non-Saudi customer) would be zero-rated in cases when supply is based on facilitating the supply of taxable services by that non-resident customer to a person in Saudi Arabia.

The public discussion of the draft is scheduled to begin 11 November 2022, upon which a final amendment is expected to be issued.

Once introduced, the change would call for Saudi companies involved in the supply of services to non-residents and those non-residents suffering from unrecoverable VAT costs to revisit the VAT treatment and, potentially, the business model of respective arrangements. Such areas may include (but are not limited to): marketing services, installation, testing, training and maintenance services, and subcontracting of work to Saudi entities.

For more information, contact a KPMG tax professional:

Philippe Stephanny |


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