Learn about Place of Supply in VAT in Saudi Arabia - FAQs

Why do I need to know my place of supply?

VAT is applied on goods or service based on where the supply takes place:

• Within the KSA
• Within the GCC
• Outside the GCC

Based on your place of supply, you can determine:

• Whether VAT will be applied or not
• The VAT rate (5%, 0%, or exempt)

How do I determine the place of supply?

The place of supply is where the final purchase of the goods or services takes place.

What is the place of supply for real estate businesses?

If real estate related services are conducted outside the KSA by a KSA registered business, the place of supply is the place where the services are conducted (outside the KSA).

What is the place of supply for wired and wireless telecommunication services?

The place of supply is where the customer who is using the services resides.

If the customer is using the service at a specific location (like an internet cafe or a hotel), then the place of supply is that location.

What is the place of supply for cultural and artistic events?

The place of supply is where the cultural or artistic event is performed.

What is the place of supply for educational services?

The place of supply is where the educational service is provided.

What is the place of supply for sports services?

The place of supply is where the sports event occurs.

What is the place of supply for entertainment services?

The place of supply is where the entertainment event is performed.

What is the place of supply for the transportation of passengers and goods?

The place of supply is where the transportation service is performed. If you travel inside the KSA, the supply is taxable at 5%. Outside the KSA, it is zero-rated. If the service involves transport both within the KSA and outside the KSA, it is taxed based on the supply within the KSA (5%) and outside the KSA (0%).

My transportation service is based in multiple countries. What is my place of supply?

The main purpose of finding the place of supply is to determine the VAT that applies to it. In this case, the VAT is calculated by proportionally dividing the value of the service with regards to how much of the service is being performed inside the KSA and outside the KSA.

My business is registered in two different GCC countries. How should I account for VAT?

Each transaction incurs VAT from the GCC country in which it takes place.