The April 2025 amendments to the VAT Implementing Regulations represent the most significant restructuring of digital commerce VAT rules since the Kingdom first introduced VAT in 2018. The recast Article 47 goes far beyond a technical clarification — it redraws who bears VAT liability across the entire digital economy, extending deemed-supplier status to a broader class of platforms and covering a new category of supply that did not previously exist in the framework.
What Changed and Why
Before the April 2025 amendments, the online interface and portal rules under the old Article 47(2) were narrowly constructed. They applied only to electronically supplied services supplied through an interface or portal acting as an intermediary for a non-resident supplier. The deemed-supplier presumption could be rebutted by meeting two conditions: the non-resident was expressly identified as the supplier, and the interface operator did not authorise charging or set the general terms.
The April 2025 amendments — issued under ZATCA Board Resolution No. 01-06-24, published in Official Gazette Issue 5082 on 18 April 2025 — recast this framework across three new provisions:
| Provision | What It Does | Effective |
|---|---|---|
| Amended Article 47(2) | Extends deemed-supplier rule to any services (not just electronic) facilitated electronically through online marketplaces for non-resident suppliers | 18 April 2025 |
| New Article 47(3) | Extends deemed-supplier rule to goods and services facilitated through online marketplaces for resident but non-registered Saudi suppliers | 1 January 2026 |
| New Article 47(4) | Defines “online marketplace” and clarifies when a platform is not deemed to facilitate a supply | 18 April 2025 |
| New Article 47(5) | Introduces joint liability for assignor and assignee on business transfers where ZATCA was not notified | 18 April 2025 |
The Online Marketplace Definition: Deliberately Broad
The new Article 47(4)(b) defines an online marketplace for the first time with explicit regulatory language:
An online marketplace is an electronic or digital platform, or similar platform, whose primary purpose — or one of its primary purposes — is to enable suppliers to display, provide, make available, or contract for their products, whether goods or services, with the customers who benefit from them.
The phrase “one of its primary purposes” is deliberate and significant. A platform does not need to be exclusively a marketplace to fall within the definition. If facilitating supplier-customer transactions is one of its core functions — even alongside other functions — it qualifies.
At the same time, Article 47(4)(a) specifies that a platform is not considered to facilitate a supply if its role is limited to:
- Processing payments related to purchases on behalf of suppliers
- Marketing and advertising the goods or services offered through it, without facilitating the actual supply process
- Redirecting customers to another online marketplace that undertakes the supply facilitation
Pure payment processors, comparison sites that redirect users, and advertising tools that do not engage in the actual supply process are outside the definition. Active intermediaries — those that genuinely bring supplier and customer together and facilitate the transaction — are inside it.
Article 47(2): Non-Resident Supplier Supplies — From April 2025
Under the amended Article 47(2), where services are facilitated electronically in the Kingdom through an online marketplace acting as intermediary for non-resident suppliers, the online marketplace is deemed to have:
- Purchased the services from the non-resident supplier for its own account
- Re-supplied them in its own name and on its own account to the customer
- Become responsible for collecting and paying the VAT on those taxable supplies
The marketplace does not merely assist — it becomes the supplier for Saudi VAT purposes. The non-resident underlying provider drops out of the Saudi VAT picture entirely for those supplies.
The Exception: When the Marketplace Escapes Deemed-Supplier Status
The deemed-supplier rule does not apply if all three of the following conditions are simultaneously met:
Condition A — Full transparency of the non-resident supplier. The non-resident supplier must be explicitly identified as the supplier during the supply process, in all contractual arrangements between all parties, and in the invoice and receipt issued to the customer regarding payment.
Condition B — Independent direct contractual relationship. An independent and direct contractual relationship must exist between the non-resident supplier and the customer, established in accordance with applicable Saudi legal provisions. The non-resident supplier must set all terms and conditions of the supply to the customer.
Condition C — No active facilitation role. The online marketplace must not set terms and conditions, determine consideration, charge customers, collect consideration, handle customer complaints, or provide offers or compensation to customers in connection with the supply.
Meeting all three conditions simultaneously in an active digital commerce context is extremely difficult. Any platform that manages the customer relationship, processes complaints, offers refunds, sets pricing, or presents itself as the contracting party fails at least one condition. Most active marketplaces will not qualify for the exception.
Article 47(3): Resident Non-Registered Supplier Rule — From 1 January 2026
The new Article 47(3) — effective 1 January 2026 — closes a different gap. It addresses the situation where goods or services are supplied in the Kingdom through an online marketplace acting as intermediary for resident suppliers who are not VAT-registered.
Under this provision, the marketplace is again deemed to have purchased those goods or services for its own account and re-supplied them — and bears the VAT obligation on the taxable supplies made through its platform.
Unlike the Article 47(2) rule (which is limited to services facilitated electronically), Article 47(3) extends to goods or services — covering platforms that facilitate the sale of physical goods by non-registered resident sellers. This directly impacts e-commerce marketplaces facilitating small-seller transactions where the sellers are below the VAT registration threshold.
The exception conditions under Article 47(3) mirror those under Article 47(2) — but with modified terms reflecting the resident supplier context:
- The non-registered resident supplier must be explicitly identified as the supplier in all documents and communications
- An independent and direct contractual relationship must exist between the non-registered supplier and the customer
- The marketplace must play no role in setting terms, determining price, charging, collecting payment, handling complaints, or offering compensation
Who Is Affected and What They Must Do
| Business Type | Impact | Action Required |
|---|---|---|
| Non-resident supplier using a marketplace to reach Saudi customers | VAT liability shifts to the marketplace — supplier may be relieved of Saudi VAT obligation | Confirm marketplace position; ensure no double-charging of VAT |
| Online marketplace facilitating non-resident supplier services | Deemed supplier from 18 April 2025 — must collect and remit VAT | Assess whether exception applies; register if needed; rebuild billing and remittance infrastructure |
| Online marketplace facilitating resident non-registered seller goods/services | Deemed supplier from 1 January 2026 — must collect and remit VAT | Identify affected seller segments; build compliance processes before January 2026 |
| Saudi business purchasing through a marketplace from a non-resident | If marketplace is deemed supplier, reverse charge may not apply — VAT charged by marketplace instead | Confirm from marketplace whether it is collecting VAT; avoid double self-assessment |
If a marketplace is acting as deemed supplier and is itself charging and remitting VAT, a Saudi business customer should not also self-assess via the reverse charge on the same supply. The VAT is being collected once — by the marketplace. Self-assessing as well produces a double-payment that is difficult to unwind. Confirm the VAT treatment with each platform before determining how to handle the purchase in your return.
- The April 2025 amendments recast Article 47 entirely — replacing the old interface/portal rules with a comprehensive online marketplace framework effective from 18 April 2025.
- An online marketplace is broadly defined: any electronic platform whose primary purpose or one of its primary purposes is to enable suppliers to make their products available to customers.
- Under Article 47(2), marketplaces facilitating services by non-resident suppliers are deemed suppliers for Saudi VAT — responsible for collecting and remitting the tax.
- Under Article 47(3), marketplaces facilitating goods or services by resident non-registered suppliers become deemed suppliers from 1 January 2026.
- The exception to deemed-supplier status requires all three conditions to be met simultaneously — full supplier transparency in all documents, direct contractual relationship between supplier and customer, and zero active facilitation by the marketplace. Most active platforms cannot qualify.
- Saudi businesses buying through marketplaces should confirm whether the platform is collecting VAT — and avoid self-assessing via RCM on the same supply.
- Marketplace operators that have not yet assessed their position under the new Article 47 framework should treat this as an urgent compliance priority.
This article is for informational purposes only and does not constitute legal or tax advice. Regulations referenced are based on ZATCA publications current at time of writing. Always verify with a qualified Saudi tax professional for your specific circumstances.