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.