VAT on Exports to Saudi Arabia from UAE

Non-oil trade between the UAE and Saudi Arabia reached about AED 137 billion in 2022, with three quarters linked to UAE exports and re-exports. 

At the same time, the UAE keeps a 5 percent standard VAT rate while Saudi Arabia applies 15 percent on most supplies and imports.  

For businesses shipping goods or services into Saudi markets, VAT in Saudi Arabia now shapes pricing, contracts and working capital in a very direct way.

UAE–Saudi VAT Basics in Brief

UAE law generally zero rates exports of goods and many services, provided specific timing and evidence conditions are satisfied. 

The Saudi system then charges 15 percent VAT at destination on most goods entering local circulation, plus many cross-border services.  

Intra-GCC rules sit on the destination principle. VAT usually follows where the customer or final consumption sits, not the supplier’s registration state. That idea drives treatment for VAT on exports to Saudi Arabia, whether goods or services.

Zero Rating UAE Exports into Saudi Arabia

For goods leaving the UAE towards Saudi buyers, UAE VAT law generally allows zero rating where export conditions hold. Suppliers must show that goods physically left UAE territory within the required window, often 90 days, and keep customs plus shipping evidence.

Practical points for traders include:

• Confirm that the Saudi customer is treated as the importer of record at the border, not a UAE middle entity.
• Align Incoterms, invoices and transport contracts so that export evidence and ownership shifts match the VAT story.

Where conditions fail, UAE VAT at 5 percent can apply even though the commercial deal targets a Saudi customer, which then complicates Saudi input recovery.

Saudi Arabia Import VAT and Cash-Flow Choices

In Saudi Arabia, imported goods normally attract 15 percent VAT at customs on the customs value plus duties and certain fees. That amount becomes input tax for a registered buyer, subject to ordinary deduction rules and documentation tests under ZATCA guidance. 

Larger importers can, in some cases, obtain permission to shift payment out of customs into the regular VAT return, easing border cash-flow pressure. 

For groups planning supply chains around Saudi Arabia VAT rate on imports, the choice between upfront payment and deferred accounting now sits alongside customs valuation strategy and duty reliefs.

GCC Cross-Border VAT and Services to Saudi Arabia

For cross-border services, the GCC agreement and Saudi regulations apply destination rules with special cases. Business-to-business services often tax where the customer is established. Many business-to-consumer services follow special place-of-supply rules linked to location of performance, real estate or events.

When UAE consultancies, agencies or technology firms bill Saudi VAT registrants, GCC cross border VAT concepts decide which state taxes the fee. 

If Saudi rules treat the supply as having a Saudi place of supply, the Saudi customer may self-account under reverse charge at 15 percent, while the UAE side treats its fee as outside UAE VAT or zero rated. 

For VAT on services to Saudi Arabia, contracts should clarify customer registration status, fixed establishments and intended use of the service. Hence, both sides can support the final VAT choice during an audit. 

Evidence, Contracts and Practical Control Points

UAE–Saudi trade now attracts regular attention during FTA and ZATCA reviews, especially where zero-rated exports and import input deductions are material.

 Helpful control points include:

• Matching customs declarations, shipping records and tax invoices for each export lane into Saudi Arabia.
• Reconciling Saudi import VAT on customs statements with input claims in local VAT returns.
• Keeping contracts and purchase orders that show which entity carries risk and title at each stage.
• Tagging intra-GCC service flows in ledgers so that reverse charge entries and zero-rating tests can be traced quickly.

Good record keeping reduces the risk of double taxation or denial of input relief when both authorities review the same trading lane.

How Arnifi Supports UAE–Saudi VAT Flows

Complex supply chains now link UAE distribution hubs with Saudi retail, e-commerce and project activity. Arnifi works with trading houses, manufacturers and service firms that want calm, consistent handling of UAE and Saudi VAT along each route. 

Typical work includes mapping every flow against UAE export rules and Saudi place of supply tests. Teams also check VAT on exports to Saudi Arabia against the correct customs role and design ledgers that split Saudi import VAT by business unit.

Arnifi also helps align contracts so pricing and VAT clauses support the intended position, not undermine it during reviews.

Conclusion

Exports into Saudi markets now sit at the heart of UAE non-oil trade strategy, with bilateral trade already crossing AED 137 billion in a recent year. Zero-rated UAE exports, 15 percent Saudi import VAT and complex service rules give cross-border deals real tax weight. 

Solid evidence and clean ledgers reduce that pressure. Arnifi supports boards and finance leads by turning parallel regimes into one shared map, so tax, customs and commercial decisions pull in the same direction.

FAQs

1. Does UAE VAT usually apply on goods sent to Saudi Arabia?

Often, UAE VAT zero rates qualifying exports where evidence and timing rules hold. Saudi Arabia then applies import VAT at 15 percent when goods clear local customs.  

2. Who normally pays Saudi VAT on imported goods?

Saudi Customs usually collects VAT at the border on behalf of ZATCA. Registered buyers later deduct that amount as input tax, subject to documentation and ordinary eligibility checks. 

3. How does VAT work on UAE services supplied to Saudi businesses?

Many cross-border B2B services follow destination rules, so Saudi Arabia taxes the fee. The Saudi customer may apply reverse charge, while the UAE supplier often treats its invoice as zero rated. 

4. What documents support zero-rated UAE exports into Saudi Arabia?

Key evidence usually includes customs declarations and transport documents plus export invoices. Authorities expect those records to prove physical movement out of the UAE within required time limits. 

5. Why do traders worry about double VAT on GCC lanes?

Weak coordination can leave one state charging VAT while another denies input deduction. Clear roles, aligned contracts and clean reconciliations keep GCC cross border VAT exposure low during future audits.