ZATCA: Zakat, Tax and Customs Authority in Saudi Arabia Explained

If you run a business in Saudi Arabia, you’ll likely deal with ZATCA at some point. It oversees Zakat, taxes and customs, from VAT registration and tax returns to e-invoicing and import procedures. Understanding which requirements apply to your business can help you avoid filing mistakes, missed deadlines and unnecessary penalties.

This guide explains what the Zakat, Tax and Customs Authority does, the taxes it manages, how e-invoicing works, how to get a Zakat certificate, and how to avoid the most common Saudi Arabia ZATCA tax violations.

What Is ZATCA?

The Zakat, Tax and Customs Authority is the Saudi government body responsible for assessing and collecting Zakat, administering taxes and managing customs. It was formed in 2021 by merging the General Authority of Zakat and Tax (GAZT) with the Saudi Customs Authority, bringing domestic tax and border trade under one roof. Its roots go back much further, to the Department of Zakat and Income Tax set up in 1950.

Key Functions of ZATCA

Zakat collection from Saudi and GCC-owned businesses
Tax administration, covering VAT, corporate income tax, withholding tax, excise tax and real estate transaction tax
Customs control, including import duties, trade facilitation and fighting smuggling
Compliance and audits, reviewing returns, books and invoices
Taxpayer support, through guides, online services, awareness campaigns and a call centre

Taxes Managed by the Zakat, Tax and Customs Authority

Tax	Who it applies to	Rate
Zakat	Saudi and GCC-owned businesses (and the Saudi/GCC share of mixed companies)	2.5% of the Zakat base
Corporate income tax	Non-Saudi, non-GCC ownership share of companies, and foreign businesses with a permanent establishment	20% of taxable profit (higher for oil and hydrocarbon activities)
VAT	Businesses with taxable sales above SAR 375,000 a year (voluntary from SAR 187,500)	15% standard rate
Withholding tax	Payments to non-resident parties, such as fees, royalties and dividends	5% to 20%, depending on the payment
Excise tax	Tobacco, energy drinks, sweetened drinks and some other goods	100% on tobacco and energy drinks; a sugar-based tiered system for sweetened drinks since January 2026
Real Estate Transaction Tax (RETT)	Sale or transfer of property	5% of the property value
Customs duties	Imports into the Kingdom	Varies by product classification and applicable customs tariff

What Is Zakat Tax in Saudi Arabia?

Zakat is an Islamic obligation to give a share of wealth to those in need. In Saudi Arabia, it’s also a legal requirement for businesses. Zakat is generally calculated at 2.5% for a Hijri year. Where a business uses a Gregorian financial year, an adjusted annual rate of approximately 2.578% may apply to relevant components of the Zakat base. The calculation can differ according to the company’s financial statements and applicable Zakat rules.

What Is the Difference Between Zakat and Income Tax?

	Zakat	Corporate income tax
Who pays	Saudi and GCC owners	Non-Saudi, non-GCC owners
What’s taxed	The Zakat base (broadly, net worth)	Taxable profit
Rate	2.5%	20%
Paid when making a loss?	Can still be due, because it’s based on wealth	Usually not, because it’s based on profit

A company owned partly by Saudis and partly by foreign investors pays both: Zakat on the Saudi or GCC share, and income tax on the foreign share.

ZATCA E-Invoicing (FATOORA)

ZATCA e-invoicing, also known as FATOORA, requires businesses subject to Saudi Arabia’s e-invoicing rules to generate invoices through compliant electronic systems. The requirements generally apply to resident VAT taxpayers and parties issuing invoices on their behalf, while non-resident taxable persons are excluded. Implementation takes place in two phases.

Phase 1: Generation. Since 4 December 2021, taxpayers subject to Saudi Arabia’s e-invoicing rules have been required to generate and store invoices using a compliant electronic system. Required information includes the VAT registration number and a QR code for simplified invoices. Handwritten invoices and invoices created using ordinary text-editing or spreadsheet software are not compliant.

Phase 2: Integration. Businesses selected for this phase must connect their e-invoicing systems to ZATCA’s FATOORA platform. Standard tax invoices generally require clearance before they are issued, while simplified tax invoices must be reported to the platform within 24 hours. ZATCA introduces the integration requirements in waves and notifies affected taxpayers at least six months before their deadlines.

The net keeps widening. In July 2026, ZATCA announced the 25th wave, covering businesses whose VAT-subject revenue exceeded SAR 187,500 in any year from 2022 to 2025. These businesses must complete integration by 1 February 2027.

Getting Ready for ZATCA E-Invoicing

Check whether your business has received a wave notification on the ZATCA portal
Confirm your accounting or POS software is ZATCA-compliant for Phase 2
Complete onboarding to generate the cryptographic stamp for your devices
Test the integration before your deadline, as rejected invoices can disrupt billing

Registering With ZATCA

When you get a Commercial Registration, a Zakat and tax file is usually linked to your company on the ZATCA portal. From there, the main steps are:

Activate your account on the ZATCA e-services portal using your CR details.
Register for VAT once your taxable sales pass the mandatory threshold, or earlier if you choose to register voluntarily.
Register for other taxes if they apply, such as withholding tax or excise tax.
Set up e-invoicing with a compliant system.
File returns on time, monthly or quarterly for VAT depending on turnover, and yearly for Zakat and income tax.

Importers also use Fasah, ZATCA’s digital customs platform, to clear shipments and track goods at the border.

How Do I Get a Zakat Certificate in KSA?

A Zakat certificate is an official document issued by ZATCA to confirm a taxpayer’s relevant Zakat compliance status. Businesses may need it for certain government procedures, tenders or commercial transactions.

Log in to your company’s account on the ZATCA portal.
Make sure the required Zakat returns have been submitted and any outstanding liabilities have been settled.
Open the Zakat services section and select “Request for Certificate”, then “New Request”, if a certificate has not already been issued.
Complete the requested details and access the certificate through the available ZATCA service.

Issuing the certificate is free, and it’s usually available quickly if your file is up to date. Unfiled returns, unpaid balances or a ZATCA account that isn’t linked properly to your CR are the most common reasons for delays. The certificate has a validity period, so download a fresh copy before each tender or application.

Common Saudi Arabia ZATCA Tax Violations and Their Penalties

Late VAT registration, missed returns and incomplete records are common compliance risks for businesses in Saudi Arabia. The table below summarises penalties under the VAT Law. Other taxes, including Zakat, income tax and excise tax, have their own requirements and enforcement rules.

Violation	Penalty
Not registering for VAT when required	SAR 10,000
Not filing a VAT return on time	5% to 25% of the tax that should have been declared
Late payment of VAT	5% of the unpaid tax for each month or part of a month
Filing an incorrect return that reduces the tax due	50% of the difference
Issuing a tax invoice while not registered	Up to SAR 100,000
Not keeping invoices, books or records	Up to SAR 50,000
VAT evasion, such as submitting false documents to reduce VAT due	At least the tax due, up to three times the value of the goods or services

E-invoicing violations can also attract penalties. The treatment depends on the type of violation and the rules applicable at the time, so businesses should review ZATCA notices and correct any compliance problems promptly.

Fixing a Mistake Before ZATCA Finds It

If you discover an error in a VAT return you’ve already submitted, review whether a correction or voluntary disclosure is required through ZATCA’s portal. The procedure and any penalties depend on the nature of the mistake and the applicable regulations. Correcting errors promptly also helps keep your tax records accurate.

ZATCA Tax Penalty Waiver Extension

To encourage businesses to catch up, ZATCA has run a fines cancellation initiative for several years and extended it repeatedly. The latest ZATCA tax penalty waiver extension runs from 1 July to 31 December 2026.

What’s covered: Subject to the initiative’s conditions, eligible penalties include late tax registration, late filing, late payment and certain corrections to VAT returns. The initiative applies across the relevant tax laws, including VAT, income tax, withholding tax, excise tax and real estate transaction tax.

To qualify, you must:

Register for any tax you’re required to register for
Submit all outstanding tax returns
Pay all outstanding tax, or get ZATCA’s approval for an instalment plan

The initiative does not cover tax evasion penalties, fines already paid before the initiative took effect, certain penalties under Article 45 of the VAT Law, or penalties connected to returns due after 30 June 2026. The current extension ends on 31 December 2026. Businesses with outstanding tax obligations should check their eligibility and complete the required steps before that date.

How Express Business Service Helps With ZATCA Compliance

Keeping up with the Zakat, Tax and Customs Authority is easier when someone is watching the deadlines for you. Express Business Service supports companies across the Kingdom with:

ZATCA account activation and VAT, withholding tax and excise registration
VAT, Zakat and income tax return preparation and filing
Zakat certificate applications
ZATCA e-invoicing readiness checks for Phase 2 integration
Help applying for the penalty waiver before the deadline
Customs registration and support with Fasah

Need help with ZATCA? WhatsApp Express Business Service on +966 54 868 1590 and speak to our team about your Zakat, tax or e-invoicing requirements.

Conclusion

At the heart of business in Saudi Arabia is the Zakat, Tax and Customs Authority. It is responsible for the collection of Zakat and tax as well as enforcement of importation regulations. It is also in the process of improving its electronic invoicing system. Knowing which taxes you are liable for can save you from a plethora of problems.

Frequently Asked Questions

Is there personal income tax on salaries in Saudi Arabia?

No. ZATCA doesn’t tax salaries earned by employees, whether they’re Saudi or expatriate. Taxes such as Zakat, corporate income tax and VAT apply to businesses and transactions, not to wages.

How can I check whether a company’s VAT number is valid?

ZATCA offers a free online verification service where you can enter a VAT number and confirm it belongs to a registered business. It’s worth checking before you pay a large invoice that includes VAT.

Do freelancers need to register with ZATCA?

Freelancers carrying out taxable economic activities may need to register for VAT if their taxable supplies exceed SAR 375,000 within the relevant 12-month period. Voluntary registration may be available from SAR 187,500, subject to the applicable conditions. Other ZATCA obligations depend on the individual’s legal structure and activities, so falling below the VAT threshold does not automatically mean no tax registration is required.

How long should I keep tax records?

VAT rules generally require businesses to keep invoices, books and records for at least six years, with longer periods for some records, such as those linked to capital assets and real estate. Keep them organised and easy to retrieve, as ZATCA can request them during an audit.

How do I contact ZATCA?

You can contact ZATCA on 19993 within Saudi Arabia or +966 11 204 8998 from abroad. Support is available 24/7. You can also use live chat on the official ZATCA website, email info@zatca.gov.sa or contact its customer support account on X (@Zatca_Care).

ZATCA (Zakat, Tax and Customs Authority) in Saudi Arabia