Saudi Arabia Launches 15% VAT Refund Scheme for Tourists, Including GCC Nationals

In a significant update to its tax laws, Saudi Arabia has implemented a Value Added Tax (VAT) refund system for tourists, which officially came into effect on April 18, 2025. Tourists, including those from Gulf Cooperation Council (GCC) countries like the UAE,can now reclaim the 15% VAT paid on eligible purchases during their visit.

The Zakat, Tax and Customs Authority (ZATCA) confirmed that VAT will be applied at 0% for qualifying tourist transactions from approved service providers, with refunds processed upon the tourist’s departure. This move aligns with Saudi Arabia’s broader goals of enhancing tourism and improving the visitor experience.

Until the Electronic Services Law is fully implemented, tourists from GCC nations will enjoy the same refund rights as non-GCC nationals.

Authorised third-party providers will assist in managing the refund process, with shared responsibility between them and the tourists in cases of invalid claims.

ZATCA will soon release detailed guidelines covering:

• Tourist eligibility

• Approved goods and services

• Minimum purchase thresholds

• Supplier registration criteria

• Step-by-step refund procedures

In parallel, updates to the VAT framework clarify requirements for business transfers, mandating VAT notification within 30 days. Businesses must retain all financial records post-VAT deregistration, as obligations continue even after deregistration.

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