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May 15, 2026

This ZATCA guideline clarifies the value added tax treatment for the healthcare sector in Saudi Arabia. It distinguishes between the economic activities of private providers and the non-economic public authority activities of government bodies. The guide details the standard 15% VAT on private healthcare services and the zero-rating for qualifying medicines and medical goods, referencing official classifications. It provides specific rules for invoicing, particularly for insurance claims, and outlines procedures for input tax deduction, record-keeping, and the mechanism for the State bearing VAT costs for Saudi nationals availing private healthcare services.

Healthcare

VAT Guideline

January 2023

1. Introduction

1.1. Implementing a Value Added Tax (VAT) system in the Kingdom of Saudi Arabia (KSA)
1.2. Zakat, Tax, and Customs Authority
1.3. What is Value Added Tax?
1.4. This Guideline

2. Definitions of the principal terms

3. Economic Activity and VAT registration

3.1. Economic Activity
3.2. Activities carried out by Government Healthcare Providers
3.3. VAT on charges by Government Healthcare Providers
3.4. Suppliers of services to Government Healthcare Providers
3.5. Other activities carried out by Government Healthcare Providers
3.6. Mandatory registration
3.7. Optional registration

4. Healthcare services provided by the private sector

4.1. VAT treatment of healthcare services
4.2. Combined charges for health services and medicines
4.3. Invoicing
4.4. Other charges

5. Insurance claims and third party billing

5.1. Contractual status who is the recipient of healthcare services
5.2. Invoicing
5.3. Special cases

5.3.1. Discounted pricing for insurers
5.3.2. Rejection of invoices by insurer
5.3.3. Mechanism for the State to bear VAT in respect of private health care services provided to Saudi nationals

6. Medicines and medical equipment

6.1. Supplies of qualifying medicines and medical equipment
6.2. Imports of qualifying medicines and medical equipment
6.3. Non-qualifying medicines and medical equipment
6.4. Special cases

6.4.1. Consignment stocks
6.4.2. Free samples

7. Input tax deduction

7.1. General conditions
7.2. Capital assets
7.3. Refund claims for Government Healthcare Providers

8. VAT reporting

8.1. Date of supply
8.2. Charging VAT
8.3. Filing VAT Returns
8.4. Keeping of records
8.5. Tax obligations
8.6. Requesting a ruling
8.7. Correcting past errors

9. Penalties

10. Transitional Rules related to Healthcare

10.1. Disregard early invoice or payment
10.2. Continuous supplies spanning VAT introduction date
10.3. Application of the transitional provisions for the zero rating of existing contracts ('grandfathering')

10.3.1. Eligible contracts
10.3.2. Certification

11. Contacting Us

12. Frequently asked questions

The Zakat, Tax and Customs Authority ('“ZATCA', “Authority”) has issued this Guide for the purpose of clarifying certain tax treatments concerning the implementation of the statutory provisions in force as of the Guide's issue date. The content of this Guide shall not be considered as an amendment to any of the provisions of the Laws and Regulations applicable in the Kingdom.

Healthcare VAT customer relationship diagram showing patient as the recipient of services from private healthcare provider with insurance company making payment

Healthcare VAT customer relationship diagram showing insurance company as the recipient of services from private healthcare provider with patient receiving benefit

The invoice will be paid as follows:

Contents