GTL Summary:

Document Type: IR - Implementing Regulations
Law: Value Added Tax Law
Decision Number: 3839-article-9
Year: 2016
Country: 🇸🇦 KSA
Official Name: Article 9 - Registration Provisions Applying to Specific Circumstances
Last updated at: 2025-11-27 14:38:44 UTC

Chapter 2 - Taxpayers

Article 9 - Registration Provisions Applying to Specific Circumstances[3][4]

  1. A Person who at any time has annual Supplies made in the Kingdom whose value exceeds the Mandatory Registration Threshold which are exclusively zero-rated Supplies, is excluded from the requirement to register. A Person who falls under this Paragraph may elect to apply to register voluntarily.

  2. In cases where two or more Related Persons carry on similar or related activities, the Authority may issue a notification requiring that the value of their annual Supplies be added within a specified duration, and this combined figure be used as each Person's annual Supplies value.

  3. Every Nonresident Person who registers in the Kingdom must by itself or through a tax representative approved in accordance with Article 77 of these Regulations use the application form prescribed by the Authority. The particulars of this tax representative, if any, must be listed on the application form.

  4. A Nonresident Person who changes their tax representative must notify the Authority within twenty (20) days of the change taking place.

  5. An activity carried out by a governmental authority shall not be regarded as an economic activity for the purposes of applying the Law and these Regulations if all of the following conditions are met:[5]

    1. The activity is transferred to the governmental authority pursuant to a statutory instrument.

    2. The governmental authority does not carry on the activity according to economic or commercial criteria.

    3. The activity is carried out by the governmental authority exclusively, meaning that no private sector competition exists in relation to that activity.

  6. Economic activity does not include the activity carried out by employees or other persons to the extent that they are contractually bound to an employer, or bound by any other legal relationship that creates an employment relationship between the employee and the employer in respect of employment conditions, remuneration, and the employer’s responsibility, for the purposes of registration under the Law and these Regulations.[6]

  7. The provision set out in paragraph 6 of this Article shall apply to the specified consideration in the form of benefits or wages paid to employees under employee secondment contracts, provided that the following conditions are met:[7][8][9]

    1. An employment relationship exists between the seconded employee and the client.

    2. The client is a legal person or a natural person authorized by a decision of the governor.

    3. The supplier is a government entity, a licensed labor resources company, or any person holding a valid license for labor secondment services issued by the competent authority.

    4. The contract or other contractual documents between the supplier and the client must include a clear statement of the wage or benefit amount for the employee, and the value of the commission subject to tax must be clearly specified.

Footnotes

[3]Paragraph 7 was amended pursuant to BoD Resolution No. (7-2-20) dated 12/08/1441H corresponding to 05/04/2020G and deleted pursuant to BoD Resolution No. (1-5-20) dated 14/02/1442H corresponding to 01/10/2020G. Please see Footnote [8] for the earlier text.

[4]Paragraph 8 was added pursuant to BoD Resolution No. (7-2-20) dated 12/08/1441H corresponding to 05/04/2020G and deleted pursuant to BoD Resolution No. (1-5-20) dated 14/02/1442H corresponding to 01/10/2020G. Please see Footnote [9] for the earlier text.

[5]Paragraph (5) was amended by Resolution of the Board of Directors of the Zakat, Tax and Customs Authority No. (1-4-23), dated 26 Dhu al-Qa‘dah 1444H (corresponding to 15 June 2023). Prior to the amendment, paragraph 5 read as follows:
'5. Any activity carried out by a government entity in its capacity as a public authority shall not be considered an economic activity for the purposes of implementing the Law and this Regulation. However, if a government entity engages in activities involving the supply of goods or services in a non-sovereign capacity, such activities shall be considered as economic activities.'

[7]Paragraph 7 was added pursuant to Board of Directors Resolution No. (1-4-23) dated 26 Dhu Al-Qa‘dah 1444H (corresponding to 15 June 2023G).

[8]Earlier Article 9(7) was deleted pursuant to the decision of the Board of Directors of the General Authority of Zakat and Tax No. (1-5-20) dated 14 Safar 1442 AH, corresponding to October 1, 2020 AD. Prior to its deletion, Article 9(7) read as follows:
'A person who makes or expects to make a real-estate supply shall be regarded as carrying on an economic activity for registration purposes under the Law and these Regulations, except in the following cases:

  1. If a natural person supplies a residential property that has not been exploited for consideration during the twelve months preceding the supply, and which has been used during that period as a residence by the supplier or a member of his family for not less than 183 consecutive or non-consecutive days.

  2. The transfer of real property without consideration before the competent authority in cases of inheritance division or a comparable legitimate requirement.

  3. The transfer of real property without consideration before the competent authority for the purpose of endowment (waqf) or donation to a licensed charity, or to a public-benefit entity authorised by its regulations, or in execution of a mandatory will.

  4. The transfer of ownership of real property without consideration to a spouse or a relative up to the second degree, in accordance with the provisions of the Law.

  5. The transfer of ownership of real property by a government entity in its capacity as a public authority, as provided in paragraph (5) of this Article.

  6. Any other exceptional cases determined by the Board of Directors.

Application of this paragraph’s provisions is conditional upon the person not having previously deducted input tax borne on the purchase or construction of the property being supplied.'

The above deleted clause was amended pursuant to the decision of the Board of Directors of the General Authority of Zakat and Tax No. (7-2-20) dated 12 Sha'ban 1441 AH, corresponding to April 5, 2020 AD.

Prior to the amendment, the clause read as follows:
'A person who carries out or intends to carry out a real estate supply is considered to be engaged in an economic activity for registration purposes in accordance with the Law and these Regulations, except in cases where the property is used or intended to be used as a permanent residence by that person or by a closely related family member, as defined under the definition of relationship in paragraph 2 of Article 37 of these Regulations.'

[9]Article 9(8) inserted by Resolution No. (2-3-20) of the Board of Directors of the General Authority for Zakat and Income, dated 17 Shawwal 1441 AH, corresponding to 9 June 2020 AD was deleted pursuant to Resolution No. (1-5-20) of the Board of Directors of the General Authority for Zakat and Income Tax dated 14 Safar 1442 AH, corresponding to 1 October 2020 AD. Prior to its deletion, Article 9(8) read as follows:

  1. Without prejudice to the other provisions contained in these regulations, the Authority may establish a special mechanism for registering persons engaged in real estate economic activity (the ‘special registration mechanism’), through which the person or persons engaged in real estate supply are registered.

  2. The special registration mechanism shall apply mainly to natural persons who supply real estate that is not linked to a commercial register or similar licence from a competent authority, or to other persons, as determined by a decision issued by the Board of Directors.

  3. In cases where several persons own the real estate being supplied, each of them shall be registered based on the total value of that real estate, and the Authority shall have the right to determine the value of the supplies attributed to each person in the absence of information indicating this through the title deed or any other sources.
    The Authority shall establish special rules relating to the registration, administration, assessment and collection of tax due from persons registered under this mechanism, including procedures for registration and deregistration, notifications, the effective date of registration, the tax period, the method of filing tax returns and dealing with other relevant authorities, in addition to any other procedures deemed appropriate by the Authority.'

Fast-loading version for search engines - Click here for the interactive version