Revamped VAT Grouping Rules in Saudi Arabia (2025 Amendment Insights)

Saudi’s new VAT regulation amendments have reshaped the rules for VAT groups. Some benefits may shrink under stricter eligibility criteria and increased disclosure demands.

Key Adjustments to VAT Grouping

• Stricter eligibility — some entities (e.g. free zone entities) may be excluded.
• Each group member must satisfy new conditions individually.
• Restrictions on inter-group transactions and intra-group balancing.
• Transitional period (180 days) to comply with new group rules.

Business Considerations

• Groups should re-evaluate whether group status still fits their structure.
• Some members might need to deregister and file independently.
• Document reorganization strategies to avoid triggering VAT events.

Conclusion

VAT grouping might not be as flexible under Saudi’s 2025 reform. New criteria, exclusions & transitions mean groups must reassess their setup carefully — or lose benefits.

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