Non-resident mandatory VAT registration from the first taxable supply
A Nonresident Person who is not registered with the Authority but is obligated to pay Tax on Supplies made or received by that Person in the Kingdom must apply to the Authority for registration within thirty days of the first Supply on which that Person was obligated to pay Tax. Registration under this rule takes effect from the date of that first Supply. Unlike the resident mandatory tests in Articles 3 and 4 of the Regulations, this obligation is not framed by reference to the Mandatory Registration Threshold of SAR 375,000.
The obligation under Article 5
Article 5(1) of the Implementing Regulations provides that a Nonresident Person who is not registered with the Authority but is obligated to pay Tax on Supplies made or received by that Person in the Kingdom must apply to the Authority for registration within thirty (30) days of the first Supply on which that Person was obligated to pay Tax.
The trigger is the first Supply on which the Nonresident was obligated to pay Tax, not the exceedance of an annual-supplies threshold. The thirty-day period runs from that first Supply.
Effective date of registration
Article 5(2) of the Regulations provides that the registration of a Person who registers under Article 5(1) takes effect from the date of the first Supply on which the Nonresident Person was obligated to pay Tax. The effective date is therefore the date of that first Supply, not the start of a following month of the kind used in Article 3(2) for resident historic registration.
The Agreement position for non-residents
Article 50(3) of the Common VAT Agreement provides that a non-resident of a Member State shall be required to register in that State regardless of his business turnover if he is obliged to pay Tax in that State under the Agreement. Registration can be done directly or through the appointment of a tax representative with the consent of the Competent Tax administration. The tax representative shall take the place of the Non-Resident Person in all its rights and obligations provided for in the Agreement, subject to the provisions of Article 43(2) of the Agreement.
Article 5 of the Regulations implements that turnover-independent registration obligation for a Nonresident who is obligated to pay Tax on Supplies made or received in the Kingdom. The detailed conditions for appointing a tax representative appear elsewhere in the Regulations, including Article 9(3) and (4); those paragraphs are not restated in full here.
Contrast with resident mandatory registration
Articles 3 and 4 of the Regulations apply to a Resident Person and turn on whether the value of annual Supplies made, or expected to be made, exceeds the Mandatory Registration Threshold detailed in the Agreement. Article 50(2) of the Agreement sets that threshold at SAR 375,000. Article 5 does not incorporate that threshold test. A Nonresident within Article 5(1) must apply by reference to the first Supply on which Tax is due, regardless of turnover.
What the legislation does not determine
Article 5 does not itself define when a Nonresident is “obligated to pay Tax” on a particular Supply made or received in the Kingdom; that question depends on the place-of-supply and liability rules elsewhere in the Law, the Regulations, and the Agreement. It does not set out the full conditions for tax-representative appointment, nor any monetary penalty for a late application. It does not address voluntary registration for residents under Article 7, or the Authority’s power under Article 6(1) to register without an application where an application was required under Articles 3 and 4. Those subjects are governed by the provisions that address them.
Instruments relied on: Value Added Tax Law, Article 3, English text of the bilingual instrument (identified in the preamble to Resolution No. (01-06-24) as issued by Royal Decree No. (M/113) dated 02/11/1438H corresponding to 20/07/2017G, as amended); Implementing Regulations, ninth edition, 26/11/1444H corresponding to 15/6/2023G, unofficial English translation (Article 5 was not amended by the text of ZATCA Board Resolution No. (01-06-24) relied on here); Common VAT Agreement, Article 50(3), executed in Arabic on 27/2/1438H corresponding to 27/11/2016. The Arabic text prevails.