When an online marketplace is the deemed supplier for an unregistered resident supplier

Where the supply of goods or services in the Kingdom is facilitated through an online marketplace acting as an intermediary for a resident supplier who is not registered for tax purposes, Article 47(3) of the Implementing Regulations, as introduced by ZATCA Board Resolution No. (01-06-24), deems the marketplace to have purchased those goods or services and to have resupplied them in its own name. The marketplace is then responsible for collecting and paying the tax due on taxable supplies made in the Kingdom through it. That clause comes into force on 1 January 2026. It does not apply to a non-resident supplier, and it does not apply to a resident supplier who is registered. Clause (4), which defines an online marketplace and states when a platform is not treated as facilitating a supply, is not deferred to that date.

Commencement

Clause III of Resolution No. (01-06-24) states, as an exception to clause I, that the provisions set out in clause (3) of Article 47 of the Implementing Regulations shall come into force as of 01/01/2026. Clause I provides that the amendments are otherwise effective from the date of publication in the Official Gazette. The deferred date attaches to clause (3). It does not, on the words of clause III, attach to clause (2), clause (4) or clause (5) of Article 47.

The deemed supply

The current clause (3) provides that, in application of Article 9 of the Law and the Regulations, where the supply of goods or services in the Kingdom is facilitated through an online marketplace acting as an intermediary for a resident supplier or suppliers not registered for tax purposes, the online marketplace shall be deemed to have purchased the goods or services from the non-registered resident suppliers for its own account and to have resupplied them in its own name and for its own account to the customer benefiting from those goods or services. The online marketplace shall be responsible for collecting and paying the tax due on taxable supplies made in the Kingdom through the online marketplace.

Article 9 of the Law provides that a Taxable Person who, acting in his name, supplies or receives Goods or Services on behalf of another Person is deemed, for the purposes of the Law and the Regulations, to supply or receive those Goods or Services for himself. Clause (3) states that it is in application of that Article. The clause is limited to a resident supplier who is not registered for tax purposes, and to goods or services. It is not the rule for a non-resident supplier.

When clause (3) does not apply

The provisions of clause (3) shall not apply if all of the following apply. The resolution uses “all of the following”. The conditions are cumulative.

It must be explicitly stated that the non-registered resident supplier or suppliers are the ones making the supply, which takes place in the Kingdom, during the conduct of the supply through the customer’s online marketplace, in the contractual arrangements made between all parties to the transaction, and in the invoice and receipt issued to the customer regarding payment of the Consideration. The phrase “the customer’s online marketplace” is the phrase in the unofficial translation.

An independent and direct contractual relationship must be established between the non-registered resident supplier or suppliers and the customer benefiting from the supply, in accordance with the statutory provisions in force in the Kingdom, and the non-registered resident supplier or suppliers must set all terms and conditions related to the supply to the customer.

The online marketplace must not be the entity that sets the terms and conditions related to the supply of goods or services supplied through it; must not determine the Consideration for the supply; must not charge customers that Consideration; must not collect that Consideration; must not handle customer complaints; and must not provide any offers or compensation to customers in connection with the supply.

If any of those is not met, the “shall not apply” sentence is not engaged, on the requirement that all of them apply. The instruments relied on do not discuss partial satisfaction.

What is, and is not, facilitation

Clause (4) is a new clause. It is not covered by the 01/01/2026 commencement in clause III. It applies for the purposes of Article 47. It provides, first, that an online marketplace shall not be deemed to facilitate the supply of goods or services if its role is limited to processing payments related to the purchase of goods or services through it on behalf of suppliers, or to marketing and advertising the goods or services offered through it without facilitating the supply process through it, or to redirecting customers to another online marketplace that undertakes the supply facilitation process. It provides, second, that an online marketplace means an electronic or digital platform, or similar platform, whose primary purpose, or one of its primary purposes, is to enable suppliers to display, provide, make available, or contract for their products, whether goods or services, with the customers who benefit from them.

Clause (3) uses “facilitated”. Clause (4) states when an online marketplace is not deemed to facilitate a supply, and defines “online marketplace”, for the purposes of the Article. A person whose role is only that described in clause (4)(a) is outside the facilitation on which clause (3) depends. A platform which does not meet the clause (4)(b) definition is not an online marketplace for the Article. Clause (4) is already within the amendments made effective from publication. Clause (3) is the operative deemed-supply rule and, by clause III, comes into force on 01/01/2026. The instruments relied on do not explain how clause (4) operates in the period before clause (3) is in force.

Neighbouring clauses that are not this rule

The current clause (2) is a different deemed-supply rule. It concerns services, not goods, facilitated electronically in the Kingdom through an online marketplace that acts as an intermediary for a non-resident supplier or suppliers. The marketplace is deemed to have purchased the services from the non-resident suppliers for its own account and to have re-supplied them in its name and on its own account, and is responsible for collecting and paying the tax on taxable supplies made in the Kingdom through the marketplace. Clause (2) has its own cumulative conditions, which are not the resident-supplier conditions in clause (3). Clause III does not defer clause (2) to 01/01/2026.

Clause (5), also new, concerns joint liability of an assignor and assignee where an assignment of an Economic Activity is not notified under Article 13(13). It is not part of the marketplace rule.

The previous clause (3) in the ninth edition was a negative presumption concerning a non-resident supplier and an online interface or portal. The resolution replaces it. It is not the rule for a non-registered resident supplier. Clause (1) of Article 47 is not shown as amended.

What the legislation does not determine

Clause III states 01/01/2026 as the commencement of clause (3). It does not state any other commencement date for that clause, and it does not state that clause (2) or clause (4) is deferred to that date. Invoice content, filing mechanics, and any interaction with the reverse-charge rule in the unamended Article 47(1) are not set out, beyond the invoice and receipt condition written into clause (3). A resident supplier who is registered for tax purposes is not brought within clause (3). The clause is confined to suppliers not registered for tax purposes. Supplies of goods by a non-resident supplier are not within the current clause (2), which is confined to services. Article 47(5) is a separate joint-liability rule and not a marketplace condition.

Instruments relied on: ZATCA Board Resolution No. (01-06-24), dated 17/05/1446H, Official Gazette issue 5082, 20 Shawwal 1446H corresponding to 18 April 2025, unofficial English translation (“Errors and Omissions Excepted”), Article 47, clauses (3) and (4), current provision, and clause III; Value Added Tax Law, Article 9, English text of the bilingual instrument. The ninth edition of the Implementing Regulations (June 2023) contains an earlier Article 47(2) and (3). Those paragraphs are the “previous provision” in the resolution and are not cited as the current rule. The Arabic text prevails.

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