Overview

Amazon will automatically deduct 15% VAT from sales made by KSA-resident sellers who lack valid VAT registration numbers (VRN) in Seller Central, starting early 2026. The change is driven by Saudi tax regulations requiring proper VAT documentation. Sellers must add valid VRN before deadline and ensure legal name in Seller Central exactly matches name registered with ZATCA (Zakat, Tax and Customs Authority).

Key Points

• Automatic 15% VAT deduction — Amazon withholds 15% VAT from KSA sales for resident sellers without valid VRN on file
• Compliance-driven mandate — Required by local Saudi tax regulations, 15% rate aligns with standard KSA VAT rate since July 2020
• Name matching requirement — Legal name in Seller Central must exactly match ZATCA records, including Arabic-language names if applicable
• KSA-resident sellers affected — International sellers not KSA residents may have different VAT obligations
• Early 2026 deadline — Sellers must add VRN before cutoff to avoid automatic deductions

Update Process

• Navigate to tax settings — Seller Central > Account Settings > Tax Settings > Add or update VRN
• Verify ZATCA registration — Visit ZATCA portal to confirm your registered legal entity name
• Match names exactly — Ensure Seller Central account name matches ZATCA name character-for-character, including Arabic transliterations, abbreviations, formatting
• Address discrepancies early — If corrections needed on either end, act well before deadline to account for processing delays
• Document compliance — Save confirmation of VRN addition and name matching in case disputes arise

Consequences of Inaction

• 15% revenue reduction — High-volume sellers face substantial margin hit from automatic deductions
• ZATCA penalties — Operating without proper VAT registration exposes sellers to fines for non-compliance with Saudi tax law