What is an out-of-scope supply?

Out-of-scope supplies are those supplies that are exchanged between an overseas or unregistered supplier and an overseas buyer. VAT is not applicable to such scenarios.

There are three situations when a supply is classified as out-of-scope: 

• The supply is made by a non-taxable person.

• The supply is made outside of KSA.

• The supply is for another department within one business, or for an event with no economic benefit.