Saudi Arabia VAT Update 2026: Deemed Supplier Rules for Electronic Marketplaces

ZATCA Guidance on Deemed Supplier Obligations

The Zakat, Tax and Customs Authority (ZATCA) has issued updated guidance following amendments to Article (47) of the VAT Implementing Regulations, clarifying the VAT treatment of electronic marketplaces operating in Saudi Arabia.

While most amendments became effective on April 18, 2025, the provision under Article 47.3, relating to marketplaces facilitating supplies for non-VAT registered resident suppliers, applies to supplies where the contract with customers is concluded on or after January 1, 2026.

The guidance applies to both resident and non-resident electronic marketplaces facilitating supplies in the Kingdom.

Key Clarifications under Article 47

When an Electronic Marketplace Is Considered to Facilitate a Supply

ZATCA considers an electronic marketplace to be facilitating a supply where it is involved in the transaction, including cases where it:

✔️ Participates in ordering or delivery

✔️ Controls pricing or payment terms

✔️ Enforces supply conditions, including refunds

✔️ Guarantees supplier performance

✔️ Provides customer services

✔️ Collects consideration from customers

✔️ Manages transaction processing through the platform

✔️ Uses the marketplace’s trademark or branding in relation to the supply

Determining the Location and Status of Primary Suppliers

Electronic marketplaces are required to conduct reasonable and ongoing verification of seller residency, including:

✔️ Bank account country

✔️ Business address

✔️ Commercial registration details

For resident suppliers that are not VAT registered, marketplaces are expected to verify VAT registration status through the taxpayer search tool on the ZATCA portal.

Where a resident supplier’s VAT registration is invalid at the date of supply, the marketplace is responsible for accounting for VAT on the supply in Saudi Arabia.

Exceptions to Deemed Supplier Treatment

A marketplace may not be treated as a deemed supplier where non-facilitation can be substantiated, including through:

✔️ Information displayed to customers on the platform

✔️ Contractual arrangements between the supplier, marketplace, and customer

✔️ No marketplace involvement in setting supply terms or handling customer claims

Additional Clarifications:

✔️ A non-resident supplier registered for VAT in Saudi Arabia making a B2B supply to a VAT-registered customer in the Kingdom is not required to charge VAT

✔️ Where a marketplace acts as a deemed supplier, no separate VAT is chargeable on commissions charged to suppliers; the commission forms part of the taxable margin

✔️ Non-resident marketplaces treated as deemed suppliers in Saudi Arabia are not required to issue e-invoices

✔️ No deemed supply arises where goods or services are supplied free of charge by a non-resident supplier

✔️ Where a marketplace facilitates supplies by a resident VAT-registered supplier, the marketplace is not treated as a deemed supplier

✔️ ZATCA has clarified invoicing mechanisms between suppliers, customers, and marketplaces across different scenarios

✔️ The guidance applies to both resident and non-resident electronic marketplaces

✔️ Article 47.3 applies to contracts concluded on or after January 1, 2026, and to orders placed from that date

Compliance Considerations for 2026:

The ZATCA guidance under Article 47 confirms the increased VAT compliance responsibility of electronic marketplaces in Saudi Arabia, platforms facilitating supplies in the Kingdom should review VAT registration status, seller on boarding and verification procedures, contractual arrangements, invoicing processes, and system readiness to ensure compliance with the applicable rules from 2026.