VAT on Exports to Saudi Arabia from UAE: A Complete Guide | One Desk Solution

VAT on Exports to Saudi Arabia from UAE: A Complete Guide

Exporting goods and services from the United Arab Emirates (UAE) to Saudi Arabia is an integral aspect of business in the Gulf region. With the introduction of Value Added Tax (VAT) in both countries, understanding tax implications is crucial for compliance and profitability.

At One Desk Solution, we are recognized as one of the top tax, VAT, and bookkeeping expert service providers in Dubai and the UAE, helping businesses navigate VAT regulations for seamless, compliant operations. Our firm supports over 200 clients across the US, Canada, UK, UAE, and beyond, specializing in accurate transaction recording, compliance, VAT consultancy, and more.

This comprehensive guide will address how VAT applies to exports from the UAE to Saudi Arabia, examine the relevant scenarios for businesses, explain documentation requirements, and highlight how expert support from One Desk Solution can optimize your VAT compliance.

Need Expert VAT Guidance for UAE-Saudi Exports?

Our team of VAT specialists can help ensure your cross-border transactions are fully compliant with both UAE and Saudi regulations. Contact us today for personalized support.

Call/WhatsApp: +971-52 797 1228

What is VAT and Its Role in GCC Trade?
Overview of UAE and Saudi VAT Systems
VAT Treatment on Exports to Saudi Arabia: Key Scenarios
Documentation and Compliance Essentials
Reverse Charge Mechanism Explained
VAT on Export of Services: Rules for B2B and B2C
Frequently Asked Questions about VAT on Exports
How One Desk Solution Can Help

What is VAT and Its Role in GCC Trade?

Value Added Tax (VAT) is a consumption tax applied at each stage of the supply chain, ultimately paid by the end consumer. Both the UAE and Saudi Arabia introduced VAT as part of the GCC VAT Framework, creating a standardized approach to indirect taxation within the region.

UAE VAT: Introduced in January 2018 at a 5% standard rate.
Saudi VAT: Introduced at 5% (2018), increased to 15% in 2020 for domestic transactions.

GCC VAT Agreement:

This harmonized framework allows for smoother intra-GCC trade but also contains transitional and country-specific rules that every exporter must understand.

Overview of UAE and Saudi VAT Systems

	UAE	Saudi Arabia
VAT Introduction	January 2018	January 2018
Standard VAT Rate	5%	15% (since July 2020)
Zero-Rated Exports	Yes, under conditions	Yes, under conditions
Registration Threshold	AED 375,000	SAR 375,000

Exports between GCC countries like UAE and Saudi are not automatically standard-rated; special rules apply for zero-rating and compliance.

VAT Treatment on Exports to Saudi Arabia: Key Scenarios

1. Direct Exports (Supplier Arranges Shipment)

Definition: Goods are shipped from the UAE to Saudi Arabia by the UAE supplier or an agent.

VAT Treatment:

Zero-rated (0%) if:
- Goods leave the UAE within 90 days from supply.
- Valid proof of export is maintained.
- Recipient details (including VAT registration if available) are included.

2. Indirect Exports (Customer Arranges Shipment)

Definition: The Saudi importer arranges collection/export of goods.

VAT Treatment:

Zero-rated (0%) if:
- Goods are exported within 90 days.
- UAE supplier retains all shipping and export documents proving the shipment.

3. When Standard VAT Applies (5%)

Exporter fails to provide valid proof that the goods left the UAE.
Goods are not exported within required timelines.
Documentation is incomplete or non-compliant.
Sale is to an unregistered Saudi recipient and below the registration threshold, the supplier may have to charge VAT at 5%.

VAT Applicability Table

Scenario	VAT in UAE	Saudi VAT (on import)
Export to VAT-registered recipient (with valid documentation)	0%	15% (via reverse charge)
Export to unregistered recipient, below Saudi threshold	5%	15% (when cleared)
Export to unregistered recipient, above Saudi threshold	Requires Saudi VAT registration	15%
Failure to provide export evidence	5%	15%

Documentation and Compliance Essentials

For any export from UAE to qualify for zero-rated VAT, strict documentation and compliance regulations must be met:

Essential Documents Required

Customs export declaration
Commercial invoice (with export stated)
Proof of shipment (airway bill, bill of lading, etc.)
Import customs documents from Saudi Arabia
Proof of payment from Saudi customer
Recipient's VAT number (when applicable)

Key Compliance Points

Goods must physically leave UAE within 90 days of supply.
Export documentation must be retained for at least five years.
Tax invoices must clearly state export status and recipient details.
Missteps in documentation can lead to VAT at 5% on the transaction.

Reverse Charge Mechanism Explained

What is the Reverse Charge Mechanism (RCM)?

The Reverse Charge Mechanism (RCM) shifts the responsibility for VAT reporting from the exporter (UAE) to the importer (Saudi Arabia), provided the recipient is VAT-registered in Saudi Arabia.

UAE Exporter: Does not charge VAT; records the transaction as zero-rated.
Saudi Importer: Self-assesses and pays 15% VAT to Saudi authorities (ZATCA).
Documentation: Critical for both exporter and importer for compliance and proof.

VAT on Export of Services: Rules for B2B and B2C

Export of Services from UAE to Saudi Arabia

Service Type	Recipient Type	UAE VAT Treatment	Notes
Professional, IT, consulting, etc.	B2B (VAT-registered)	0% (reverse charge applies)	Saudi company pays VAT to ZATCA
Digital/personal services	B2C	5%	UAE supplier must charge VAT to Saudi customer

Key Conditions

For B2B, recipient must be outside UAE and VAT-registered in Saudi Arabia.
Proper contractual documentation and invoice details required.
For B2C, the service is supplied where the customer resides, so UAE VAT applies.

Frequently Asked Questions about VAT on Exports

Is VAT always zero-rated on exports from UAE to Saudi Arabia?

No, only under strict documentation and compliance conditions. Otherwise, 5% VAT applies.

What is required to prove zero-rated export?

Bill of lading, customs declaration, evidence of shipment, proof of payment, and confirmation of receipt.

How is VAT applied when exporting to a VAT-registered Saudi company?

Zero-rated in UAE; Saudi importer applies RCM and pays 15% VAT.

How long must export documents be retained?

At least five years as per UAE VAT rules.

What about services?

B2B services are zero-rated if the recipient is VAT-registered; B2C services are taxed at 5% in UAE.

At-A-Glance Scenarios for VAT on UAE Exports to Saudi Arabia

Export Scenario	UAE VAT Rate	Documentation Needed	Saudi VAT	Registration Requirement
Goods, recipient VAT-registered	0%	Shipment/export docs	15% RCM	No Saudi VAT registration needed
Goods, recipient not registered, below threshold	5%	Standard docs	15%	No
Goods, recipient not registered, above threshold	Register in KSA, charge 15% in KSA	All export & registration docs	15%	Must register in Saudi Arabia
Services to Saudi business	0%	Service contract, invoice, VAT number	15% RCM	No
Digital/personal services	5%	Standard invoice	15% at import	No

How One Desk Solution Can Help

Navigating VAT on exports can be daunting. One Desk Solution is your trusted partner for seamless financial and compliance support in Dubai and the UAE:

VAT Advisory Services: Expert analysis and consultancy on taxes, compliance, and cross-border transactions.
Bookkeeping and Accounting: Accurate recording, categorization, and reconciliation of all financial operations.
VAT Return & Filing: Preparation and timely submission of VAT returns to avoid penalties.
QuickBooks Setup and Training: Streamline financial management with cloud bookkeeping.
Documentation Audit: Ensure all required export documentation is collected and safely stored.
VAT Registration in KSA: Assistance for UAE businesses required to register and comply with Saudi tax laws.
Customized Compliance Reports: Gain actionable insights and maintain a smooth audit trail.

Our experienced team serves clients across industries—real estate, construction, IT, retail, travel, and more—delivering tailored, reliable solutions for every need. Outsourcing VAT and bookkeeping to One Desk Solution enables your business to focus on core competencies while ensuring regulatory adherence.

Ready to Simplify Your UAE-Saudi Export VAT Compliance?

Let our experts handle your VAT requirements so you can focus on growing your business. Get in touch today!

Call/WhatsApp: +971-52 797 1228

Contact Our VAT Experts

Conclusion

Successfully exporting from the UAE to Saudi Arabia requires an in-depth understanding of VAT regulations, proper documentation, and a clear view of cross-border compliance requirements. Most exports—both goods and B2B services—can qualify for zero-rated VAT if all compliance and evidentiary requirements are met. Mistakes or documentation lapses, however, can result in unwanted tax charges, penalties, or shipment delays.

Partnering with a leading expert such as One Desk Solution safeguards your operations, ensures that every stage of your export journey is fully compliant, and empowers your business to thrive in the competitive GCC trade landscape.

If you need bespoke VAT, tax, or bookkeeping expertise in Dubai or the UAE, contact One Desk Solution today and let us help you streamline your financial management and cross-border trade compliance.