Saudi Arabia: Zakat, Tax, and Customs Authority implements Paragraph 3 of Article 47 under Decision No. 01-06-24 amending the Value-Added Tax Implementing Regulation

On 1 January 2026, the provisions in Paragraph 3 of Article 47 of Zakat, Tax and Customs Authority (ZATCA) Decision No. 01-06-24 amending the Value-Added Tax Implementing Regulation enter into force. These provisions establish rules for deemed supplies by taxable persons where goods or services are provided without consideration, for non-economic purposes, or following a change in use resulting in non-taxable consumption. The value of such supplies is determined as the original purchase price, the cost of production, or, where these cannot be established or where a capital asset is involved, the fair market value at the time of supply. The provisions also introduce rules for electronic marketplaces facilitating supplies on behalf of suppliers, including non-registered resident suppliers. In such cases, the marketplace is deemed to have received and resupplied the goods or services in its own name and is required to account for VAT on taxable supplies made in the Kingdom. This treatment does not apply where the supplier is explicitly identified in the contractual documentation and invoices, a direct contractual relationship exists between the supplier and the customer and the supplier determines the essential terms of the supply, or where the marketplace does not control pricing, collect payment, manage complaints, or provide compensation.