Clients in Saudi Arabia using Upwork must pay a 15% VAT on services like marketplace, contract initiation, conversion, and recruiter fees unless a valid VAT ID is provided. This 15-digit ID exempts them from charges and must be revalidated if information changes. VAT is specific to country location and updates when location changes.
Saudi Arabia requires Upwork to collect value-added tax, or VAT, and remit the tax to the government of Saudi Arabia if we don’t have a valid VAT ID on file for you. VAT is a tax on goods or services, including our services to you, and remit means to send money for a payment.
Examples of services that VAT applies to in Saudi Arabia
- Marketplace Fee
- Contract Initiation Fee
- Conversion Fee
- Recruiter Fee
When we charge tax, it’s because your government requires us to, which means this tax may change or apply to additional services in the future.
Tax rate
In Saudi Arabia, the VAT rate is 15% of the cost of the service being taxed. For example, if you pay $100 USD in client marketplace fees, you will pay $15 in tax, for a total of $115.
You’ll see the estimated amount of tax when you check out and on your invoices and Transaction History.
VAT ID
If you provide a valid VAT ID to Upwork, we will not have to collect this tax from you. You can enter or edit your VAT ID in your Tax information.
We’ll check whether the VAT ID you provide is in a valid format and provide you with a validation response — this usually happens right away.
We’ll also display the VAT ID you provide to us on your invoices. If your VAT ID changes or is incorrect, you’ll need to update it to change what displays on your invoice.
Saudi Arabia VAT ID format
Your Saudi Arabia VAT ID number is different from your tax identification number. It is a unique ID that you may request from your government by registering for VAT in Saudi Arabia. The ID has 15 numeric characters, like this, for example: 345678901234503.
To learn more, visit the Saudi Arabia tax authority’s website.
Exemption
Saudi Arabia does not offer any applicable exemptions to VAT on services Upwork provides, but you can avoid VAT charges by providing a valid VAT ID.
Location and information changes
If you change locations and update your tax residence in your Tax information, we’ll automatically adjust your VAT to correspond with the rates in your new country of residence or stop collecting if there is no VAT, or a similar tax, in your new country.
However, you may have to revalidate your VAT ID when you change locations.
You may also have to revalidate your VAT ID if you make other changes to your information, such as changing your legal name.
Disclaimer:
This article is for general information only and should not be considered tax advice. It may not be updated in real time and may not reflect recent changes. We strongly encourage you to consult your country’s tax authority or your tax advisor with questions related to your specific situation.
Frequently Asked Questions
Who has to pay Saudi Arabia VAT?
Saudi Arabia’s VAT applies to services we provide to both freelancers and clients if they reside, have a permanent address, or are established in Saudi Arabia and have not provided us with a valid VAT ID.
Why are you collecting VAT for Saudi Arabia?
We’re required to comply with the tax laws of the countries where we operate to continue to do business in those countries. Saudi Arabia requires that we collect VAT on Upwork services and remit them to your government unless we have a valid VAT ID on file for you.
Do you still collect Saudi Arabia VAT if I provide Upwork with a valid VAT ID?
No, if you provide a valid VAT ID, we do not have to collect and remit VAT tax for you. To enter your VAT ID, go to your account’s Tax information.
Do I have to provide a Saudi Arabia VAT ID to Upwork?
No. However, if you do not provide a valid VAT ID, we are required to charge you VAT and remit it to the Saudi Arabia government.
If you provide a valid VAT ID, we will not be required to collect the tax. To enter your VAT ID, go to your account’s Tax information.
What if I’m only residing in this country temporarily?
We are still required to collect VAT even if you are only residing in Saudi Arabia temporarily. If you move to another country, you can update your tax residence in your Tax information. We’ll automatically adjust your VAT to correspond with the rates in your new country of residence or stop collecting if there is no VAT, or a similar tax, in your new country.
If I pay VAT before I enter a valid VAT ID, will you refund that money once I enter it?
No, we remit that money directly to the Saudi Arabia government and will not be able to refund it. You may be able to claim a credit with your tax authority for what you paid. We recommend that you consult with your government’s tax authority or your tax advisor for more information.