If you are a natural or legal person, engaged in economic activity, and conduct your activity on a continuous and regular basis with the aim of generating income, then you are subject to the regulations and legislation of Value Added Tax (VAT) in Saudi Arabia. There are two types of registration: mandatory and optional.
Optional Registration:
The legislation allows individuals or entities whose supplies or expenses in the past twelve months or expected in the next twelve months exceed 375,000 Saudi Riyals, with an increase of more than 187,500 Saudi Riyals, to optionally register for VAT purposes. Also, those whose supplies consist entirely of zero-rated items are allowed to register optionally. The registration becomes effective from the date of acceptance of the registration application by the authority.
Mandatory Registration:
Registration becomes mandatory for anyone who supplies goods and services subject to VAT, provided that their supplies of taxable goods or services during the past twelve months or expected in the next twelve months reach the mandatory registration threshold of 375,000 Saudi Riyals. Registration must be done within 30 days from the end of the month in which the supplies reach the mandatory threshold, and the registration becomes effective from the beginning of the first month in which the supplies are expected to exceed the mandatory registration threshold.