The thresholds
- Mandatory: taxable supplies above SAR 375,000 over 12 months, or expected to exceed it in the next 12 months.
- Voluntary: above SAR 187,500 but below the mandatory threshold.
- Not required: below SAR 187,500.
How to calculate it
It's based on taxable supplies over the last 12 consecutive months, not your financial year. Check monthly: what's the rolling 12-month total? And if a large contract will push you over, registration is required now.
Example: sales of SAR 300,000 over the last 12 months plus a signed SAR 120,000 contract for the coming months = SAR 420,000 expected. You're above the mandatory threshold.
What if you're late?
Failing to register on time carries a SAR 10,000 penalty — plus the VAT you should have charged customers since the obligation started, which you often can't recover from them.
Is voluntary registration worth it?
Sometimes: if most customers are VAT-registered businesses, or you pay significant VAT on purchases you'd like to recover. Sometimes not: if you sell to consumers and can't raise prices. It depends on your business — exactly what we review in the consultation.
- Mandatory at SAR 375,000; voluntary at SAR 187,500
- Rolling 12 months + expected supplies
- Late = SAR 10,000 penalty + VAT you didn't collect
Want someone to handle this for you?
Your first consultation is free. Tell us where you stand and we'll come back with a clear plan.