Unlock Hidden Profits: The VAT Refund Opportunity in Saudi Arabia

Since 2022, businesses operating in Saudi Arabia have the opportunity to reclaim VAT on Accounts Payable (AP) expenses, something that was previously impossible. Yet, many companies are still unaware of the significant refunds they are entitled to.

At Taxback International (TBI), we’ve seen firsthand how businesses are missing out on millions in reclaimable VAT. With our streamlined and automated VAT recovery process, we can help businesses maximise their refunds while staying compliant with local regulations. This blog explores the latest updates in Saudi Arabia’s tax landscape, how your company can reclaim VAT and why businesses should act now to recover what’s rightfully theirs.

The Emerging Trend: Saudi Arabia’s VAT Recovery Evolution

VAT reclaim is rapidly becoming a key financial strategy for businesses with operations in the Gulf Cooperation Council (GCC). Saudi Arabia has introduced digital e-filing for foreign VAT recovery, making the process more efficient than ever before.

This shift means that companies can now reclaim VAT on a wide range of business expenses, including travel, hospitality, advertising, tooling and supplier invoices to name just a few. However, many businesses remain unaware of the scope of VAT they are eligible to recover, leading to millions in unclaimed refunds each year.

The Hidden Opportunity: Businesses Are Missing Out on VAT Refunds

Based on client data, we’ve identified that businesses across multiple industries—including travel, advertising, manufacturing, pharmaceuticals, and logistics, are sitting on millions in unclaimed VAT refunds.

Some of the most commonly overlooked VAT refund opportunities include:

✅ Business travel expenses (hotel stays, transportation, meals)

✅ Supplier invoices for goods and services

✅ Conferences, training, and event expenses

✅ Cross-border transactions involving Saudi Arabia

✅ Advertising & marketing expenses (campaign costs, agency fees, digital media spend)

✅ Tooling & equipment costs (machinery, industrial tools, manufacturing supplies)

For example, one of our clients recovered €23 million, proving how big the opportunity is.

How TBI Has Simplified the Saudi VAT Reclaim Process

Navigating VAT reclaim regulations can be complex, especially with evolving compliance requirements. That’s where Taxback International (TBI) comes in.

We have developed an efficient, technology-driven process to help businesses recover VAT seamlessly.

Our solution ensures:

🔹 Full compliance with Saudi Arabia’s digital e-filing system

🔹 Automated tracking and submission for VAT claims

🔹 Maximum recovery with minimal administrative effort

For instance, we were contracted by a German-based aircraft engine manufacturer, to recover VAT on specific expenses incurred in Saudi Arabia. The VAT refund applications, which covered the tax years 2020-2023, amounted to €23 million in KSA VAT charged on purchases.

A key feature of our service is TBI Pay, a solution that allows businesses to easily transfer funds from Saudi Arabia. For this aircraft engine manufacturer, TBI Pay was instrumental in simplifying VAT refund processing, as they were able to quickly and cost-effectively transfer the funds to their UK and European bank accounts, avoiding the operational challenges typically associated with local Saudi bank accounts.

Our expert team manages the reclaim process from start to finish, allowing businesses to focus on their operations while we optimise their VAT refunds.

The Financial Impact: Why VAT Recovery Matters

Reclaiming VAT is not just about compliance, it’s about boosting cash flow and improving profitability. Many businesses underestimate the impact of VAT refunds, but for large corporations and SMEs alike, these refunds can represent a substantial financial return.

Consider this:

💰 Reclaiming VAT = Direct Cost Savings

💰 Recovered VAT = Increased Working Capital

💰 Optimised VAT Recovery = Higher Profit Margins

Act Now: Don’t Leave Money on the Table

With VAT reclaim now available on many business expenses, there has never been a better time to optimise your VAT recovery strategy. Saudi Arabia’s e-filing system has made the process more accessible, but businesses must act quickly to ensure compliance and secure refunds before deadlines pass.

Ready to reclaim your VAT?

Don’t let reclaimable VAT go to waste—unlock hidden savings and optimise your business finances now!