Saudi Arabia’s VAT Refund Scheme for Tourists and GCC Nationals: What It Means for Travelers, Retailers, and Investors?

In April 2025, Saudi Arabia launched a new value-added tax (VAT) refund program for tourists and GCC nationals, allowing eligible visitors to reclaim the 15 percent VAT on purchases over SAR 500 (US$133). 
 
This initiative marks another step in Vision 2030’s plan to diversify Saudi’s economy, strengthen tourism, and attract global retail investment and business incorporation in the KSA.

For travelers, the scheme translates into tangible savings on shopping. For retailers, it opens the door to increased tourist spending and competitive positioning alongside other Gulf markets.  

And for investors, it is a signal that Saudi Arabia is building a more open, service-oriented economy. This article highlights how the program works, who qualifies, what is eligible, and why it matters to different stakeholders. 

Saudi Arabia’s VAT Refund Scheme – A Detailed Overview

1. Who Can Claim a VAT Refund?

Saudi Arabia’s VAT refund program is designed to benefit tourists while maintaining regulatory oversight. It applies to: 

• Non-resident tourists aged 18 or above, holding a valid passport. 

• GCC nationals from Bahrain, Kuwait, Oman, Qatar, and the UAE who present either a passport or valid GCC ID and are treated as non-residents for refund purposes. 

Travelers must leave the Kingdom within 90 days of the purchase date and complete the refund validation process before departure. 

2. What Purchases Qualify? 

To qualify for a VAT refund: 

• The minimum spend is SAR 500 (US$133) in a single transaction, or accumulated through up to three receipts from the same store on the same day. 

• Only physical goods for personal use are eligible. 

• Goods must be unused and exported within 90 days of purchase.

3. What Is Not Eligible?

The program excludes:

• Services such as hotel stays, dining, and hospitality. 

• Vehicles, boats, and other large-ticket items. 

• Consumables such as food, beverages, tobacco, and fuel. 

These restrictions align with global norms to ensure refunds are given only on exported retail goods rather than items consumed locally. 

4. How the Process Works?

The refund process has three key stages, which are explained below. 

– Shopping stage 

Tourists must shop at ZATCA-approved outlets, which display “Tax Free” or “VAT Refund Available” signage. Not all stores participate, so shoppers should confirm eligibility with store staff or use digital tools like the Global Blue Store Locator. 

To start the process, tourists present a valid passport or GCC ID at checkout to receive a VAT refund form. 

– Departure verification

Before leaving Saudi Arabia, travelers must validate their VAT refund forms at airport kiosks. These are located at:

• King Khalid International Airport in Riyadh 

• King Abdulaziz International Airport in Jeddah 

• King Fahd International Airport in Dammam

At these points, travelers present their refund forms and purchased goods, which must be unused. Officials may verify receipts, identity documents, and goods to ensure compliance with the 90-day export requirement. 

– Refund issuance

Once validated, travelers can receive their refund in cash (up to SAR 5,000 per day) or via card transfer. Cash refunds are unavailable at the North Terminal of Jeddah’s King Abdulaziz International Airport, where card refunds are the only option.

5. Summarized Process

1. Shop at a ZATCA-approved store displaying “Tax Free” or “VAT Refund” signage, with a minimum spend of SAR 500 in a single transaction or combined from up to three receipts on the same day.
2. Present your passport or valid GCC ID at checkout to request the VAT refund form. 
3. Keep receipts and the completed form. 
4. Validate your form at an airport kiosk before departure. 
5. Choose your refund method: cash (up to SAR 5,000 daily) or card transfer. 
6. Export goods within 90 days of purchase. Only unused items for personal use qualify. 

6. Why Saudi Arabia Introduced the Scheme

The VAT refund program is a strategic tool in Saudi’s Vision 2030 plan, which aims to increase tourism’s contribution to GDP from 6 percent to 10 percent and attract 150 million annual tourist visits by 2030. By reducing the cost burden for visitors, the scheme makes shopping in Saudi Arabia more cost-effective.

Similar systems in the UAE and Bahrain have helped boost high-value retail spending, and Saudi Arabia is now positioning itself in the same league. The legal framework for this initiative was introduced through amendments to the VAT Implementing Regulations, effective April 18, 2025.  

7. Implications for Tourists

For international travelers, especially those from nearby Gulf states, the program offers significant savings on high-value goods such as luxury fashion, jewelry, electronics, and cultural souvenirs. This could tip the scales for tourists deciding between shopping destinations in the region. 

The clear refund process and growing network of participating retailers, along with growing number of retail business setup in Saudi Arabia also improve Saudi Arabia’s appeal as a shopping hub. 

8. Implications for Retailers

For Saudi retailers, the VAT refund program is both an opportunity and a responsibility. Participating stores must: 

• Register with ZATCA as authorized outlets. 

• Train staff to handle refund procedures and interact effectively with tourists. 

• Upgrade POS systems to issue compliant invoices and integrate with refund systems. 

• Keep accurate records to support refund claims and remain compliant with regulations. 

Retailers who join the program can attract more tourist spending, especially from high-net-worth shoppers seeking luxury products.  

9. Implications for Investors

For investors, particularly those looking for company formation in the KSA’s retail and hospitality sectors, the VAT refund scheme sends a strong signal about Saudi Arabia’s commitment to growth. 

Luxury brands and global retail chains may view the program as a green light to expand into the Saudi market, confident that the environment supports tourist spending. It also enhances the case for investment in premium shopping districts, airports, and mixed-use developments. 

– The Bigger Picture

Saudi Arabia’s VAT refund program for tourists and GCC nationals is a timely and strategic move. While VAT refunds might seem like a small piece of the economic puzzle, they can have an outsized impact on how tourists perceive value in a destination.

In countries that have implemented similar programs, refunds have encouraged visitors to shop more and return in the future. As the system expands and more retailers join, it has the potential to become a cornerstone of Saudi Arabia’s tourism economy in the years ahead.