VAT and Electronic Marketplaces in Saudi Arabia: What the “Deemed Supplier” Rules Mean for Platforms in 2026

This guidance follows amendments made last year to Article 47 (Electronic Marketplace) of the VAT Implementing Regulations. While most changes took effect from April 2025, a critical expansion of the rules under Article 47(3) will apply from 1 January 2026, significantly broadening the scope of affected platforms.

For operators of online marketplaces, digital platforms, and app-based service models, this represents a material shift in VAT accountability.

Understanding the “Deemed Supplier” Concept

Under the deemed supplier framework, an electronic marketplace may be treated as the supplier for VAT purposes where it facilitates transactions between certain suppliers and customers in the Kingdom.

Where the rules apply:

• The platform is deemed to have purchased the goods or services from the primary supplier and resold them to the customer in its own name.
• The platform becomes responsible for charging VAT, issuing tax invoices, and reporting VAT to ZATCA.

VAT liability shifts away from the underlying supplier and sits squarely with the marketplace operator. This approach reflects international VAT principles that tax authorities are increasingly adopting to address compliance challenges in platform-based business models.

When Do the Deemed Supplier Rules Apply?

ZATCA’s guide identifies two key scenarios where an electronic marketplace will be treated as a deemed supplier:

1. Non-Resident Suppliers

Where a platform facilitates the electronic supply of services to customers in Saudi Arabia by non-resident suppliers, the platform is treated as the deemed supplier and assumes full VAT responsibility.

2. Unregistered Resident Suppliers (Effective 1 January 2026)

From 1 January 2026, the rules extend further. Platforms facilitating the supply of goods or services by resident suppliers who are not registered for VAT must also act as the deemed supplier.

This change is particularly significant, as it captures a wide range of small and micro-businesses that operate below the VAT registration threshold but sell through digital platforms.

What Qualifies as an “Electronic Marketplace”?

ZATCA defines an electronic marketplace broadly. It includes any digital platform or technological infrastructure, such as a website, app, gateway, or API, that connects buyers and sellers to display, offer, or contract for goods or services.

Common examples include:

• General e-commerce platforms
• Food delivery and quick-commerce applications
• Short-term accommodation and booking platforms
• Personal and on-demand services platforms
• Digital content marketplaces
• Transportation and mobility service platforms

The definition focuses on function and control, not branding or business labels.

Key VAT Responsibilities for Marketplaces

The guidance sets out clear operational obligations for platforms acting as deemed suppliers:

VAT Registration

• Resident platforms must register for VAT if they meet the mandatory registration threshold. 
• Non-resident platforms must register if they make any taxable supplies in the Kingdom, regardless of value.

Due Diligence on Suppliers

Platforms are expected to conduct robust checks to determine:

• The residency status of primary suppliers
• Their VAT registration status, both at onboarding and, where relevant, at the transaction level

This places increased importance on supplier onboarding processes and data governance.

Tax Invoicing

• Platforms must issue tax invoices for facilitated supplies.
• Simplified tax invoices may be issued where the consideration is below SAR 1,000.
• Invoices must reflect the platform as the supplier, not the underlying merchant.

Platform Commissions

Where a platform charges commissions or service fees to a resident supplier, these fees are generally subject to VAT at the standard 15% rate, provided both parties are resident in Saudi Arabia.

When Is a Marketplace Not a Deemed Supplier?

ZATCA has also clarified important exclusions. A platform will not be treated as a deemed supplier if its role is limited to certain narrowly defined activities, such as:

• Payment processing only, without any broader facilitation role
• Listing or advertising services, where the platform does not set terms or demand payment
• Situations where the platform does not control pricing, contractual terms, customer interaction, complaints handling, or promotional discounts

The degree of control exercised by the platform is a decisive factor.

Why This Matters for 2026

The expansion of the deemed supplier rules from 1 January 2026 materially increases VAT risk for electronic marketplaces operating in or into Saudi Arabia. Many platforms that historically viewed themselves as “intermediaries” may now carry direct VAT exposure, along with associated compliance, systems, and audit risks.

Early action is critical. Platforms should assess:

• Whether their operating model triggers deemed supplier status
• The readiness of their invoicing and VAT reporting systems
• The robustness of supplier due-diligence processes
• Contractual arrangements with suppliers and customers

ZATCA’s guidance reinforces a clear regulatory direction: VAT accountability in the digital economy is shifting toward platform operators. For electronic marketplaces, this is not merely a technical tax update; it is a structural compliance change that requires coordinated responses across tax, legal, operations, and technology.

Businesses that act early will be better positioned to manage risk, maintain compliance, and scale confidently in Saudi Arabia’s rapidly growing digital economy.

To discuss the impact on your business, contact our team, Adel Daglas, Ganesh Nair and Mohammed Haque