Saudi Arabia Introduces VAT Refund for Tourists: What You Need to Know

In a move aimed at boosting tourism and enhancing visitor experiences, Saudi Arabia has announced that tourists will now be eligible for a refund of the 15% Value Added Tax (VAT) paid on purchases made within the Kingdom. The Zakat, Tax and Customs Authority (ZATCA) recently amended the VAT Regulation, implementing the new rule effective April 18, 2025. 

 Key Highlights of the New VAT Refund Policy 

 1. VAT Refund at Departure 

Under the new amendment, tourists will receive a refund of the 15% VAT on eligible goods and services at the time of their departure from Saudi Arabia. The refund will be processed by approved service providers authorized by ZATCA. 

 2. Zero VAT Rate for Tourists 

The regulation now stipulates that the VAT rate on eligible goods and services provided to tourists will be 0%, with the refund mechanism ensuring tourists get their money back upon leaving the country. 

 3. Approved Service Providers & Responsibilities 

ZATCA will authorize one or more service providers to facilitate tax refunds for tourists. Both the service provider and the tourist will be held responsible if any refunds are issued in violation of the rules. 

 4. GCC Tourists Treated as Non-GCC Visitors (For Now) 

Until the Electronic Service Law is implemented, tourists from Gulf Cooperation Council (GCC) countries will be treated the same as non-GCC tourists regarding VAT refunds. 

 5. Eligibility & Requirements 

ZATCA has outlined specific conditions for VAT refunds, including: 

- Minimum purchase value for refund eligibility 

- Criteria for identifying a "tourist" under the new rules 

- Requirements for suppliers to qualify as "approved suppliers" 

- Procedures for submitting refund applications 

 Additional VAT Regulation Updates 

The amendments also introduced other key changes: 

- Business Transfers: If a taxable business activity is transferred to another entity, the transferee must notify ZATCA within 30 days (unless the original owner has deregistered). 

- Record-Keeping Post-Deregistration: Even after deregistration, businesses must retain invoices, books, and records as required by ZATCA. 

- Tax Obligations Remain: Deregistration does not exempt businesses from paying any outstanding dues to the authority. 

 What This Means for Tourists & Businesses 

This policy is a significant step toward making Saudi Arabia a more attractive destination for international visitors, aligning with the Vision 2030 goal of increasing tourism. For businesses, especially those in retail and hospitality, this change could lead to higher tourist spending, as visitors will be incentivized to shop knowing they can reclaim VAT. 

For tourists, the process is expected to be streamlined through authorized refund providers, ensuring a smooth experience when leaving the Kingdom. 

 Final Thoughts 

Saudi Arabia’s VAT refund scheme marks a progressive shift in its tax and tourism policies, encouraging more visitors to explore the country’s offerings while enjoying financial benefits. As ZATCA finalizes the implementation details, businesses and travelers should stay updated on the latest requirements to maximize the advantages of this new system. 

Stay tuned for more updates on Saudi Arabia’s evolving tax and tourism landscape!