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May 15, 2026

This ZATCA guide provides detailed clarification on the Value Added Tax (VAT) treatment for the telecommunications sector in the Kingdom of Saudi Arabia. It outlines the application of the VAT Law and its Implementing Regulations to supplies of goods and services within this industry. Key topics addressed include the definition of telecommunications and electronic services, specific place of supply rules based on customer residence and location of use, and the VAT implications for vouchers, promotions, and direct carrier billing. The guide further explains the rules for nominal supplies and input VAT deduction, ensuring compliance for taxable persons.

Telecommunications Guide

Version 2 | September 2021

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 ("ZATCA")
1.3. What is Value Added Tax?
1.4. This Guideline

2. Definitions of the Main Terms Used

3. Economic Activity and Registration

3.1. Who carries out an Economic Activity?
3.2. Mandatory registration
3.3. Optional VAT registration

4. Supplies in the Telecommunications Sector

4.1. Supplies of Goods
4.2. Supplies of Telecommunications Services

5. Goods and Services Sold in Combination

5.1. Single or multiple supplies
5.2. Allocation of Consideration to individual supplies
5.3. Special case: direct carrier billing

6. Place of Supply of Telecommunications and Electronic Services

6.1. Services provided in a specific location
6.2. Services not provided in a specific location
6.3. Determining Place of Residence
6.4. Roaming
6.5. Data Centre Services

7. Place of Supply of Other Services

7.1. Place of supply

7.1.1. Basic rule
7.1.2. Place of Supply after full implementation of VAT for intra-GCC trade

7.2. Zero-rating of services provided to non-GCC residents

8. Vouchers

8.1. What is a "qualifying" Voucher?
8.2. Face Value Vouchers
8.3. Issue of a Voucher
8.4. Supply of a Voucher
8.5. Redemption of a Voucher for goods or services
8.6. Treatment of "Non-Qualifying" Vouchers

9. Promotions

9.1. Nominal Supplies - legal background
9.2. Free goods or services provided as part of another supply
9.3. Goods or services supplied independently for no Consideration
9.4. Loyalty programmes

10. Date of Supply

10.1. Basic rule
10.2. Continuous supplies

11. Import of Goods

11.1. Collection of VAT on import
11.2. Customs duty suspension and temporary admission
11.3. Imports of goods for installation

12. Deduction of Input VAT

12.1. Resident suppliers
12.2. Proportional deduction relating to Input VAT
12.3. Non-resident suppliers

13. VAT Obligations of the Taxable Persons

13.1. Issuing tax invoices
13.2. Filing VAT Returns
13.3. Keeping records
13.4. Certificate of registration within the VAT system
13.5. Correcting past errors

14. Penalties

15. Applying for the issue of rulings

16. Contacting us

Common Questions & Answers

Contents