VAT registration threshold Saudi Arabia: SAR 375,000 or 187,500?

Two numbers follow Saudi small business owners around: SAR 375,000 and SAR 187,500. One decides whether you must register for VAT at all. The other decides when your invoices have to be connected to ZATCA's Fatoora platform. They are not the same rule, and mixing them up is the quickest way to either miss a deadline or collect tax you were never required to collect.

This guide keeps them apart. It uses the figures ZATCA publishes today, on its own registration service and in its Wave 25 announcement, and it ends with a checklist you can run against your own books in an hour.

Two different rules that happen to share a number

VAT registration answers one question: does your business have to charge 15% VAT and file returns? The e-invoicing waves answer a different one: by what date must your invoicing system talk to ZATCA directly? A business can be registered for VAT for years and only now be called into the integration phase.

The confusion in 2026 comes from a coincidence. The figure ZATCA uses for optional VAT registration, SAR 187,500, is also the figure it used to select the twenty fifth wave of the integration phase. The same number, two separate obligations.

The VAT registration thresholds ZATCA publishes

On its VAT registration service for individuals practising economic activity, ZATCA states that the service targets those whose annual revenues exceed SAR 375,000, and adds that registration is optional for those whose annual revenues exceed SAR 187,500 and are less than SAR 375,000. For companies, ZATCA describes eligibility for the business registration service as annual earnings that hit or exceed the limit of voluntary or mandatory registration. One threshold makes registration a duty, and the band below it makes registration a choice.

Read the exact wording on ZATCA's VAT registration service page before you decide, and check the figure that matches your own activity.

Why Wave 25 uses SAR 187,500

ZATCA announced that Wave 25 of the integration phase covers taxpayers whose revenues subject to VAT exceeded SAR 187,500 during 2022, 2023, 2024 or 2025. Those taxpayers must integrate their e-invoicing solutions with the Fatoora platform by no later than 1 February 2027, and ZATCA said it will notify every targeted taxpayer.

Notice what the wave test is built on: revenue that is already subject to VAT. It is a selection rule for businesses inside the VAT system, not an invitation for everyone above SAR 187,500 to register.

The announcement is published in the ZATCA media centre.

Three situations, three sets of duties

Put the two rules side by side and most small businesses land in one of three places. Find yours before you buy or change anything.

• Revenue of SAR 187,500 or below. You are below both figures. There is no registration duty to manage and no wave deadline, because the wave test looks at revenue subject to VAT.
• Revenue between SAR 187,500 and SAR 375,000, not registered. Registration is your choice. Nothing is due on 1 February 2027 while you stay outside the VAT system.
• Registered for VAT, with revenue subject to VAT above SAR 187,500 in any of 2022 to 2025. You are the Wave 25 audience. Your invoicing has to reach the integration stage by 1 February 2027.

What voluntary registration really commits you to

Owners in the middle band often register to work with larger clients who want a tax invoice with a VAT number. That is a reasonable commercial decision, but it is a package, not a badge.

Once you are registered you charge VAT at 15%, you file returns on the cycle ZATCA gives you, and your invoices have to meet the e-invoicing rules for your phase. If your revenue subject to VAT then passes SAR 187,500, you also sit inside the population ZATCA draws waves from. Register when the commercial benefit is real, not to look bigger.

How to check your own figure in an hour

You do not need an adviser for the first pass. You need four numbers and your VAT returns.

1. Add up the revenue you declared as subject to VAT for each year from 2022 to 2025, one total per year.
2. Compare each total with SAR 187,500. One year above it is enough for the Wave 25 test.
3. Compare your current annual revenue with SAR 375,000 to see whether registration is a duty or a choice for you.
4. Check the contact details and email address ZATCA holds for you, because the wave notice goes there.
5. Write the result on one page: registered or not, in the wave or not, and the date you must be ready.

Getting ready without overbuying

If you are in Wave 25, the work is in the invoice itself, not in paperwork. Phase 2 invoices are generated in the XML format ZATCA uses, signed with a cryptographic stamp, and sent to Fatoora: standard invoices are cleared before the buyer receives them, and simplified invoices are reported within 24 hours. Daftarix is built for both phases, so a quotation becomes an invoice with VAT, a QR code on simplified invoices and the XML file that ZATCA expects. Our page on ZATCA e-invoicing for Saudi businesses sets out what the system does at each step.

If you want the detail of who the wave covers and how the deadline works, read our guide to ZATCA Wave 25 and the 1 February 2027 deadline. Start with your own revenue numbers, then pick the tool.

Four mistakes we see in the middle band

Businesses sitting between the two figures tend to make the same handful of errors, and each one costs either money or time.

• Charging VAT before registering. A tax line on an invoice from a business that holds no VAT number creates a problem with the buyer and with the Authority. Register first, then charge.
• Reading a wave announcement as an order to register. The waves speak to taxpayers who are already in the VAT system. A press release about SAR 187,500 does not change your registration status.
• Testing the wrong revenue. The wave test looks at revenue subject to VAT, not every riyal that passed through the business. Exempt and out of scope amounts do not belong in that total.
• Waiting for the deadline month. Integration involves onboarding, a cryptographic stamp identifier and real invoices going through the platform. January 2027 is a poor month to discover a gap.

None of these need an adviser to avoid. They need the right total in front of you and a calendar date you believe.

Frequently asked questions

Is the VAT registration threshold in Saudi Arabia SAR 375,000 or SAR 187,500?

Both figures are real and they do different jobs. ZATCA's registration service states that it targets annual revenues above SAR 375,000, and that registration is optional for annual revenues above SAR 187,500 and below SAR 375,000.

Does passing SAR 187,500 mean I must register for VAT?

No. In that band ZATCA describes registration as optional. The SAR 187,500 figure becomes a deadline only inside the e-invoicing waves, where the test is revenue already subject to VAT.

I registered voluntarily last year. Am I in Wave 25?

Check your revenue subject to VAT for 2022, 2023, 2024 and 2025. If it exceeded SAR 187,500 in any of those years, you fall in the group ZATCA described, and ZATCA notifies the taxpayers it has selected.

What happens on 1 February 2027?

That is the date by which Wave 25 taxpayers must have integrated their e-invoicing solution with the Fatoora platform, as announced by ZATCA.

Can I keep issuing invoices from a spreadsheet?

Not once you are in the integration phase. The invoice has to be produced as XML, stamped and sent to ZATCA, which a spreadsheet cannot do.

Know your number, then act on it

Write down four yearly totals, compare them with SAR 187,500 and SAR 375,000, and the two rules stop competing for your attention. If you are inside Wave 25, you have a dated target and enough time to hit it calmly. Book a demo and we will walk through your invoices and what the integration phase asks of them.