Marketplaces take on non-resident digital services VAT obligations January 2026
As part of the April published by the tax authorities, ZATCA, amendments to the Saudi Arabia VAT Implementing Regulations, are changes to the VAT obligations for digital marketplaces facilitating sales of digital services to consumers.
Saudi Arabia VAT on digital services was introduced in
After 1 January 2026, Article 47 of the Implementing Regulations will include new obligations for electronic marketplaces and other parties involved in the supply of electronic services. The key focus is on non-resident suppliers and non-VAT registered resident suppliers, where electronic marketplaces facilitate as intermediaries in taxable transactions supplied locally.
1. VAT Liability for Non-Resident Suppliers
Electronic marketplaces acting as intermediaries for non-resident suppliers of digital services will become deemed supplier to be the supplier. This means the marketplace is treated as having purchased the services and resold them through its platform. As such, it becomes responsible for:
- Charging and collecting VAT,
- Filing and paying VAT to the Zakat, Tax and Customs Authority (ZATCA),
- Maintaining records and ensuring compliance for all taxable supplies facilitated within the Kingdom.
Exemption from this deeming provision is possible if all the following apply:
- It is clearly stated in all documentation (supply process, contracts, invoices) that the non-resident supplier is making the supply.
- The marketplace does not control the transaction—i.e., it doesn’t set prices, manage customer complaints, handle payments, or offer customer compensation.
2. VAT Liability for Non-VAT Registered Resident Suppliers
Similar provisions apply where the marketplace intermediates for a resident supplier not registered for VAT. The platform will again be deemed the supplier and assume VAT obligations unless:
- The supplier is clearly identified as the provider in all contracts and receipts,
- There’s a direct contractual relationship between supplier and customer, in compliance with KSA rules,
- The marketplace does not influence the terms, pricing, or customer interactions.
3. When Marketplaces Are Not Deemed Suppliers
An electronic marketplace is not considered to be facilitating supply if it only:
- Processes payments,
- Markets or advertises goods or services,
- Redirects customers to another platform that actually facilitates the supply.
