Amazon Will Auto-Deduct 15% VAT from Saudi Arabia Sellers Without Valid Registration Starting July 2026
Starting July 1 2026 Amazon.sa will automatically withhold 15 % of gross proceeds from any seller lacking a validated Saudi VAT registration number. The deduction triggers instantly once the account is flagged, and the legal name must exactly match the Arabic name on the VAT certificate. Sellers under the 375,000 SAR annual sales threshold may still be subject to the withholding.
Overview
Starting July 1 2026, Amazon will automatically withhold 15 % of the gross proceeds from any seller who operates on the Saudi Arabia marketplace (Amazon.sa) but does not have a verified VAT registration number on file. The deduction applies the moment a seller’s account is flagged as non‑compliant, which can instantly erode profit margins. Saudi‑based sellers must therefore confirm or update their tax information well before the deadline to avoid the automatic charge.
Key Points
- 15 % automatic withholding — Accounts lacking a validated Saudi VAT number will see 15 % of every sale deducted from the payout beginning July 1 2026.
- Exact name match required — The legal name entered in Seller Central must mirror the name on the VAT certificate down to Arabic script, spacing, and punctuation; any deviation triggers a validation failure.
- No grace period — Amazon has indicated that the withholding starts on the first day of July, with no interim window for correction after the date.
- Threshold uncertainty — Businesses with annual sales under 375,000 SAR are exempt from VAT registration under Saudi law, yet Amazon has not clarified whether they will still be subject to the 15 % deduction.
- Risk of double taxation — Sellers already collecting 15 % VAT from customers could face a second 15 % deduction from Amazon unless their VAT details are correctly recorded in the platform.
What's Changing
- VAT verification enforcement — Amazon will scan each Saudi‑resident seller’s tax profile for a valid VAT registration number. For example, a seller who entered “1234567890” without attaching a matching certificate will be flagged and have 15 % withheld from all subsequent sales.
- Name‑to‑certificate alignment — The system cross‑checks the legal name on the account with the name on the VAT certificate. If a seller’s certificate lists “شركة الأمل للتجارة” but the Seller Central profile shows the English transliteration “Al‑Amal Trading Co.”, the account will be deemed non‑compliant and the deduction will apply.
Analysis & Recommendations
Why This Matters
The 15 % withholding can instantly erode margins – a 200 SAR sale would net only 170 SAR before other fees. Because there is no grace period, non‑compliant accounts lose revenue from day one, making immediate VAT registration and name alignment essential for Saudi‑based sellers.
Key Takeaways
- 15 % of gross proceeds will be automatically deducted from July 1 2026 for Saudi sellers without a validated VAT number.
- The legal name in Seller Central must exactly match the Arabic name on the VAT certificate, including spacing and punctuation.
- There is no grace period; the withholding starts on the first day of July once the account is flagged.
- Sellers with annual sales under 375,000 SAR are exempt from VAT registration by law, but Amazon has not clarified if they are exempt from the 15 % ...
Recommended Actions
- →Log into Seller Central > Settings > Tax Settings and enter a valid Saudi VAT number that matches the certificate exactly.
- →Go to Seller Central > Account Info > Legal Entity Name and update the name to match the Arabic spelling on the VAT certificate.
- →If annual sales are below 375,000 SAR, consider obtaining a voluntary VAT registration and enter it in Tax Settings to avoid the 15 % withholding.
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