Background and challenges

A German-based manufacturer specialising in the production and servicing of military and civil aircraft engines, partnered with Fintua to recover Value Added Tax (VAT) incurred in the Kingdom of Saudi Arabia (KSA).

However, the businesses faced several hurdles:

  • No standardised VAT refund process: When VAT was introduced in KSA, there was no formalised mechanism for foreign businesses to claim refunds. This led to confusion and lengthy delays for international companies.
  • Unclear eligibility and documentation requirements: The absence of clear guidelines made it difficult to determine which expenses qualified for refunds and what documentation was needed – causing inefficiencies and increasing the risk of non-compliance.
  • Requirement for a local SAR bank account: One of the most significant barriers was the need to hold a Saudi Riyal (SAR) bank account with a KSA-based bank. Most foreign businesses lacked a local presence or banking relationships, making this a major compliance challenge.
  • Operational and financial strains: Establishing and maintaining a local bank account solely for VAT recovery imposed unnecessary administrative complexity, costs and resource demands.

Solution

To overcome these barriers, the manufacturer deployed Recover, our automated VAT recovery solution – supported by Pay, our global payments solution.

  1. Strategic VAT submission process
    • Multi-channel application process
    • In the absence of a standardised system, we leveraged a hybrid approach—submitting claims via email, post, and custom-designed application forms that captured all necessary transaction details.
    • Tailored applications to meet KSA standards
    • We developed structured and compliant VAT refund applications aligned with ZATCA’s evolving requirements. This proactive strategy significantly improved approval rates.
  2. Ongoing monitoring and engagement
    • Proactive communication with ZATCA:
    • Our VAT specialists maintained continuous engagement with ZATCA throughout the refund process. By addressing queries early, we kept applications on track and avoided delays.
    • Local collaboration for faster resolution:
    • Working closely with a local sub-agent allowed us to swiftly handle compliance concerns and accelerate claim approvals.
  3. Elimination of banking roadblocks
    • Global payments via Pay
    • By using Pay, the client sidestepped the need for a local SAR bank account. VAT refunds were transferred directly into their preferred accounts—simplifying operations and reducing compliance burdens

Results

Thanks to our expertise and hands-on support, the manufacturer successfully recovered €23 million in VAT from KSA.

Key outcomes:

  • €23M VAT refund approved
    Substantial recovery achieved despite regulatory complexity.
  • No need for a local SAR bank account
    Pay enabled seamless global fund transfers—eliminating banking barriers.
  • Reduced compliance risk and admin overhead
    Our structured, compliant approach ensured adherence to KSA VAT rules and eased internal resource demands.

Looking Ahead

This success story illustrates the power of combining deep VAT expertise with flexible technology. By adapting to a complex regulatory landscape, leveraging alternative submission channels, and navigating SAR banking restrictions through Pay, we delivered a frictionless recovery process.

For global businesses operating in challenging tax environments, expert-led VAT recovery can unlock significant financial returns while avoiding compliance pitfalls.