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May 15, 2026

This ZATCA guideline clarifies the Value Added Tax (VAT) treatment for supplies governed by electronic contracts in Saudi Arabia. It confirms that the VAT obligations for transactions are identical, irrespective of whether the contract is electronic, written, or oral. The guide outlines the validity of e-contracts and explains key VAT principles through scenarios involving direct sales, agent portals, and digital services. It details the distinction between disclosed and undisclosed agents, VAT registration thresholds, and the standard requirements for input tax deduction, confirming that valid tax invoices are necessary regardless of the contract's format for compliance.

VAT Guideline for Electronic Contracts

Zakat, Tax and Customs Authority

Version 1 | September 2022

1. Introduction

2. Definitions of Main Terms Used

3. What is a contract?

4. Overview of Electronic Contracts

4.1. What is an electronic contract?

4.2. Validity and status of electronic contracts

4.3. Technical requirements of electronic contracts

5. Parties to a contract

6. Applying VAT to Different Types of Contracts

Scenario 1 - Goods sold via a manufacturer's website

Scenario 2 - Goods sold via an Agent's online interface or portal

Scenario 3 - Provision of consultancy services where an electronic contract is executed

Scenario 4 - Purchase of online content through a mobile app-store

7. VAT Registration Considerations

7.1. Mandatory VAT registration

7.2. Optional VAT registration

8. Input Tax Deduction under Electronic Contracting Documents

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.

Furthermore, the Authority would like to highlight that the clarifications and indicative tax treatments prescribed in this Guide, where applicable, shall be implemented by the Authority in light of the relevant statutory texts. Where any clarification, interpretation or content provided in this Guide is modified - in relation to unchanged statutory text - the updated indicative tax treatment shall then be applicable prospectively, in respect of transactions made after the publication date of the updated version of the Guide on the Authority's website.

Introduction

The Zakat, Tax and Customs Authority ('ZATCA') is the Government Body tasked with regulating, enforcing, administering, and implementing taxation in the Kingdom of Saudi Arabia ('KSA'). ZATCA is responsible for the administration and collection of all taxes, including Value Added Tax ('VAT' or 'Tax').

The role of ZATCA includes raising VAT awareness among taxpayers, providing information for Taxable Persons to understand their VAT obligations, and facilitating VAT compliance. As part of this, ZATCA has released many guidelines to provide additional clarification on VAT, in relation to specific sectors and circumstances.

Contents

Introduction

Definitions of Main Terms Used