Saudi VAT: Qualifying Vehicles, Aircraft and Maintenance

An airline, shipping company or international carrier does not automatically buy every vehicle and maintenance service at 0%. Article 34 tests the particular means of transport, its commercial design/use, the international-use percentage and the relevant certificate. Fleet-wide averages cannot replace the prescribed per-asset assessment.

Establish the current statutory definition

Article 34(8), p. 33, covers qualifying means whose principal purpose is international transport: vehicles designed for at least ten persons or commercial goods transport, and ships/aircraft designed for commercial passenger or goods transport. Means converted or used for recreational/personal purposes do not qualify.

Read the current Arabic definition rather than extending every phrase in an older or broader English summary to all categories. A ten-seat vehicle still needs the actual principal international-use condition. A company-owned aircraft does not qualify simply because its owner conducts international business.

ZATCA’s Transport Sector guideline, version 3 May 2026, section 7, pp. 27–30, explains the commercial-use, percentage and certificate framework. Determine qualification before assuming the supplier can charge 0%.

Calculate the four-ratio average for each asset

Article 34(10) requires international use of at least 75%, calculated as the average of four international-to-total ratios: trips, distance, revenue and operating costs. The test is not simply whether international revenue exceeds domestic revenue, nor whether 75% of the fleet crosses a border.

Dariba illustration — original data: a particular aircraft’s international ratios are 70%, 80%, 90% and 80%. Their simple average is 80%, so the percentage limb is satisfied on the assumed supported data. Each other definition/certificate condition still applies.

If the four ratios are instead 60%, 70%, 75% and 75%, their average is 70% and the limb is not met. High international revenue alone does not cure the failed average. These are original calculations, not additional figures attributed to ZATCA’s example.

Use the prescribed evidence period

The continuation of Article 34(10), p. 34, requires actual data from the preceding 12 months for existing used means, or planned/expected data for the following six months for a new unused means to be purchased. Match the period and individual registration/asset identifier.

Guideline section 7.1, Example 14, pp. 29–30, considers three new aircraft. Its projected average results are about 80%, 77% and 39%; the third does not qualify under the percentage test and cannot receive the certificate on those facts.

The printed table rounds intermediate ratios. Dariba does not treat those rounded displays as a substitute for the underlying asset data or propose rounding a sub-75% result up to eligibility. Retain calculations from the actual totals, explain assumptions for new assets and substantiate the prescribed period.

Certificates follow qualification rather than create it

Article 34(4) requires the customer to provide the qualification certificate to the Authority or supplier, with the supplier retaining it. Paragraph (9) requires the customer to verify each means and all conditions before issuing the certificate.

The guideline connects this evidence to supplies and imports. A supplier should match the certificate to the actual means supplied and its facts, rather than accepting a general declaration that the customer is an international operator.

An incorrect certificate can have consequences under the applicable provisions; no automatic fixed penalty is asserted here. Dariba recommendation: retain the customer’s calculations and asset identity with the certificate and review contradictory information before invoicing. The certificate supports a substantive qualification; it does not replace it.

Repair and maintenance have their own conditions

Article 34(6), p. 33, covers actual repair, maintenance or modification of qualifying means, including necessary parts/consumables incorporated in connection with those services, intended to ensure continued operation as qualifying means. Services must be physically and effectively performed on the means, and the supplier must have the customer’s certificate linking the supplied goods/services to it.

Guideline section 7.2, p. 30, discusses this connection. A freestanding sale of spare parts into a carrier’s general stock is not automatically the same as parts incorporated in a qualifying maintenance service.

Identify the job, means, work actually performed and associated parts. A consulting report about a fleet or a general supply of workshop materials requires its own classification; the customer’s sector alone does not bring it within paragraph (6).

Related airport and port services require the correct route

Article 34(5) separately addresses services ancillary to qualifying international transport or related to qualifying means at an airport/port. Determine the actual statutory category and location; a service somewhere on an airport estate is not automatically a service to a qualifying means.

The international transport guide explains the distinction between the journey, a domestic subcontract and ancillary services. Keeping those routes separate avoids using an aircraft qualification certificate to zero-rate unrelated domestic passenger services.

Likewise, a domestic journey can be standard-rated even if the aircraft usually qualifies for international use. The rate on the transport service and qualification of the aircraft for a separate supply/maintenance relief are different questions.

Allocate mixed-fleet contracts to the actual qualifying work

Section 7.3, Example 15, p. 31, describes maintenance of 20 aircraft for SAR 80 million annually. Sixteen qualify after individual testing, and the stated allocation is SAR 64 million to qualifying work at 0% and SAR 16 million at the standard rate.

Dariba calculation on the example’s stated allocation: VAT on SAR 16 million net is SAR 2.4 million. The 16-of-20 relationship does not establish a universal equal-value allocation for every fleet; the supplier must support the actual value attributable to qualifying work.

If different aircraft consume materially different maintenance resources, establish an appropriate supported allocation rather than blindly multiplying the contract by the percentage of aircraft. The guideline requires identifying qualifying/non-qualifying means and the services concerned.

Keep qualification, invoicing and deduction aligned

Retain asset identity, design/use facts, the four-ratio data, relevant period, certificate, maintenance records, allocation and invoices. Review significant changes in use and the facts applicable at the relevant supply; do not assume a certificate answers every future period indefinitely.

Input recovery remains subject to Articles 49–51 and restrictions. A standard-rated maintenance invoice on a non-qualifying aircraft can still require actual taxable-business input analysis; failure of this output zero-rate test does not itself decide the customer’s deduction.

Dariba recommends reconciling operating data with procurement and maintenance invoicing. Qualification should be explainable from the particular asset and transaction, rather than inferred from the operator’s name, licence or fleet’s general reputation.