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In April 2025, Saudi Arabia launched a new VAT refund program for tourists and GCC nationals, allowing eligible visitors to reclaim the 15% VAT on purchases over SAR 500 (US$133).
The initiative is part of Vision 2030’s wider strategy to diversify the economy, strengthen tourism, and attract global retail investment with business setup in Saudi Arabia in the retail sector.
This move positions the Kingdom alongside Gulf peers like the UAE and Bahrain, where VAT refund systems have already proven successful in boosting retail spending.
- Who Is Eligible?
The program is open to:
Non-resident tourists aged 18 and above with a valid passport.
GCC nationals from Bahrain, Kuwait, Oman, Qatar, and the UAE, using either a passport or valid GCC ID.
Travelers must complete the refund process within 90 days of purchase and before leaving the Kingdom.
- What Purchases Qualify?
Refunds are available on physical goods purchased for personal use, with a minimum spend of SAR 500 in a single transaction (or across up to three receipts on the same day at the same store). Goods must remain unused and be exported within 90 days.
Excluded categories include services (hotels, dining), vehicles and boats, and consumables like food, drinks, tobacco, and fuel.
- How the Process Works?
Shopping Stage: Tourists buy from ZATCA-approved outlets displaying “Tax Free” signage and request a VAT refund form at checkout.
Departure Verification: Before departure, travelers validate their refund form and goods at kiosks located in Riyadh, Jeddah, or Dammam airports.
Refund Issuance: Refunds are provided in cash (up to SAR 5,000 per day) or via card transfer, depending on the airport.
- Why It Matters for Tourism?
Saudi Arabia aims to increase tourism’s GDP contribution from 6% to 10% by 2030 and attract 150 million annual visitors. By reducing shopping costs, the VAT refund scheme makes the Kingdom more competitive with neighboring destinations, especially in luxury retail and high-value goods.
For travelers, this means significant savings on purchases such as fashion, jewelry, and electronics. The simplified refund process also makes Saudi Arabia more attractive as a shopping hub.
- Implications for Retailers
Participating retailers must register with ZATCA, upgrade POS systems, and train staff to handle refund procedures. While this requires investment, the rewards are significant: increased footfall, higher sales from tourists, and improved competitiveness against regional peers.
Retailers catering to luxury shoppers stand to benefit from the influx of visitors motivated by tax savings.
- Implications for Investors
For investors considering Saudi business setup, the VAT refund system demonstrates the Kingdom’s commitment to creating a retail-friendly environment.
Global brands and high-end retailers are likely to view this initiative as a green light for expansion, especially in malls, airports, and mixed-use developments aligned with Vision 2030.
Wrapping Up
Saudi Arabia’s VAT refund scheme is more than a tax incentive—it’s a strategic move to position the Kingdom as a world-class shopping destination. For travelers, it offers real savings; for retailers, a pathway to higher sales; and for investors, a signal of long-term market potential.
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