KSA VAT Refund For Non-Residents

On February 2023, Zakat, Tax and Customs Authority (ZATCA) issued a Tax circular discussing the VAT refund process for non-resident companies incurring VAT within the KSA.

Stage 1 - Registration as a person eligible for refund

Criteria to be qualified as eligible person for a refund:

• Non-resident must be registered for tax similar to VAT in his country.
• There must be Reciprocity between KSA and that country.
• The non-resident has no residency in the KSA or any GCC countries.

Stage 2 – VAT Refund Application

Requirements to be eligible for the VAT refund application:

• Tax paid must not be a result of the supply of goods or services in any GCC country
• Tax paid is related to taxable supplies and not subject to input VAT recovery restrictions.
• Tax amount subject to the refund must be SAR 1,000 or more.
• The application must be submitted electronically through ZATCA’s portal.
• The supporting tax invoice must meet the KSA VAT invoicing requirements

Other Reminders

• Timeline: Submitted on a calendar year basis
• Deadline: 6 months from the end of the calendar year
• Only 1 refund request for the same calendar year.

Key Takeaways

• Non-resident companies incurring KSA VAT must assess whether they will qualify as eligible person for a refund.
• If eligible for a refund, assess if the requirements for the VAT refund application are met
• Be aware of the timeline (i.e., calendar year) and deadline to avoid the rejection of the refund application.