VAT in Arab countries 2026: rates, tourist refunds and e-invoicing

VAT rates in every Arab country

The table below is built from this site's country data and shows the standard rate and the other rates in each Arab country. Each name links to that country's tax guide:

The standard rate applies to most goods and services. Reduced rates, zero rates and exemptions differ from country to country, and usually cover some basic foods, medicines, education, healthcare and exports. To compare with countries outside the region, see the ranking of countries by VAT rate.

How do you take the VAT out of a price that includes it?

Consumer prices are usually shown with VAT included. To find the VAT inside a VAT-inclusive price:

VAT = inclusive price × rate ÷ (100 + rate)

Example from Saudi Arabia at 15%: an inclusive price of 1,150 riyals.

• VAT = 1,150 × 15 ÷ 115 = 150 riyals.
• Price before VAT = 1,000 riyals.

Example from the UAE at 5%: an inclusive price of 1,050 dirhams.

• VAT = 1,050 × 5 ÷ 105 = 50 dirhams.
• Price before VAT = 1,000 dirhams.

A common mistake is to take 15% of the inclusive price directly, which gives 172.5 riyals instead of 150. Try any amount in the VAT calculator, or a country calculator such as Saudi Arabia or the UAE.

Zero-rated and exempt are not the same thing

In the rates table you will see terms like zero-rated or exempt. For the consumer the result looks the same: no VAT on the invoice. For the business the difference matters:

• Zero-rated: the supply is taxable in principle, at 0%. The supplier charges the customer no VAT, but recovers the VAT it paid on purchases linked to that supply. This is common for exports.
• Exempt: the supply is outside the scope of VAT. The supplier charges no VAT and cannot recover the VAT on its purchases, so that VAT becomes a cost it may pass on in the price.

That is why an exempt service can cost a little more than you expect: the input VAT is built into its price. Which item falls into which category is set by each country's law and regulations, not by the general rule.

The Gulf: one agreement, different rules in practice

The GCC states signed the Common VAT Agreement, which sets the general framework, such as the mandatory registration threshold of 375,000 and the voluntary threshold of half that. But each state issues its own law and sets its own start date and rate:

• Saudi Arabia: 15% since 1 July 2020.
• UAE: 5%.
• Bahrain and Oman: both charge VAT; the rates are in the table above.
• Qatar and Kuwait: had not introduced VAT as of 2026.

The difference in rate shows up in monthly spending. A household spending 6,000 a month on goods and services taxed at the standard rate pays about 783 riyals of VAT within that in Saudi Arabia (6,000 × 15 ÷ 115) and about 286 dirhams in the UAE (6,000 × 5 ÷ 105). So comparing take-home pay alone between the two countries is not enough, as shown in Saudi Arabia or the UAE.

VAT refunds for tourists in the UAE

Tourists in the UAE can get back part of the VAT on purchases from shops that take part in the scheme. The conditions, according to the UAE government's official portal:

• The purchase must be at least 250 dirhams.
• 85% of the VAT is refunded, and a fee of 4.80 dirhams is deducted for each refund tag registered in the system.
• The purchases must be validated on departure within 90 days of purchase.
• The tourist must be 18 or older.

The Executive Regulation of the VAT law (Article 68) excludes residents of GCC states and aircraft crew members.

Example: a tourist buys a watch for an inclusive price of 1,050 dirhams.

• VAT included: 50 dirhams.
• 85% of that: 42.50 dirhams.
• After the fee: 42.50 - 4.80 = 37.70 dirhams.

UAE residents cannot use this scheme, because they are not tourists.

What about Saudi Arabia?

Saudi Arabia's VAT Implementing Regulations include provisions for refunding VAT to tourists through service providers approved by ZATCA, with the tourist applying before leaving. ZATCA's annual report says amendments to these provisions were published on 18 April 2025.

We found no announcement on ZATCA's website setting out how this works for tourists, such as the minimum purchase or the share refunded, so we give no figures. If you are visiting, ask the shop before you buy whether it takes part in an approved scheme.

E-invoicing in Saudi Arabia (FATOORA)

Everyone registered for VAT in Saudi Arabia must issue invoices electronically under ZATCA's system, known as FATOORA. It was rolled out in two phases:

• Phase one (generation): started on 4 December 2021 and requires invoices to be issued and kept electronically.
• Phase two (integration): started on 1 January 2023, is rolled out in waves by taxpayer group, and links invoicing systems to ZATCA's platform. Each group is notified at least six months before its date.

For consumers, an e-invoice carries a QR code that can be checked. For registered freelancers, it is part of their obligations. Read the guide to freelancer taxes in the UAE and Saudi Arabia.

What does this mean for your salary?

VAT does not appear on your payslip, but it takes part of your income when you spend. When comparing two job offers in two countries:

• Compare take-home pay first in the salary equivalent calculator.
• Estimate what you spend on goods and services taxed at the standard rate.
• Work out the VAT included in that spending with the formula above, for each country.
• Subtract the difference from your take-home pay.

In countries with no income tax, VAT is often the main tax an employee pays. Read Countries with no income tax: what expats actually pay.

Sources

1. ZATCA: VAT Law and the rate increase to 15%
2. ZATCA: guide to applying the 15% rate
3. Common VAT Agreement of the States of the GCC
4. ZATCA: VAT Implementing Regulations
5. ZATCA: Annual Report 2025
6. ZATCA: E-invoicing implementation phases
7. UAE government official portal: VAT refunds for tourists
8. Federal Tax Authority: Executive Regulation of the VAT Law (Article 68)

This guide is general information, not tax advice. Rules change; check with the authority or a qualified adviser before you act. How we work.