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Tax Services in Saudi Arabia

Saudi Arabia is a prominent business destination with plenty of opportunities for emerging ventures. Read more about the tax services, laws and regulations in Saudi Arabia.

The Kingdom of Saudi Arabia is a leading business centre in the Middle East. It attracts investors, entrepreneurs and businesses from across the globe. The governing body has been actively working towards improving infrastructure and transportation facilities. It is encouraging privatization to accelerate the country’s economic growth. Also, there has been a spree of emerging business ventures owing to the reformed tax policies.

Tax regulations are an essential aspect of the business ecosystem. Businesses persisting in the kingdom must ensure compliance with the country’s tax laws to avoid any legal troubles. Therefore, tax services in Saudi Arabia are a reliable way for companies that can help in regulating the entire taxation process effectively. By availing tax services in Saudi Arabia, business ventures can save time without excessive expenditures. The following sections highlight the taxation system and procedure in Saudi Arabia.

Tax System in Saudi Arabia

The Department of Zakat and Income Tax (DZIT) regulates taxation in Saudi Arabia. It is a governing authority that is responsible for the administration and collection of tax liabilities. The corporate tax system in Saudi Arabia is of two types - Income tax and Zakat. Companies operating within the country are required to pay their income taxes or Zakat to DZIT to obtain a tax clearance certificate.

Income tax applies to non-GCC residents with ownership in one of KSA’s companies. Zakat, on the other hand, is applicable for KSA or GCC ownership in a Saudi Arabia company. It is a mandatory payment based on Islamic concepts. For companies having both a local as well as foreign partner, income tax is applicable for the international partner whereas, for the local partner, Zakat will be applicable. 

Types of Taxes in Saudi Arabia

The residents of Saudi Arabia have to comply with various taxes depending on the individual income arising through a permanent establishment in the kingdom. The following are the types of taxes applicable to the citizens of the Saudi nation:

Corporate Income tax

According to the Saudi Arabia laws, companies registered with the rules and regulation of the country would qualify as a resident corporation. The income arising from these resident corporations is taxable. The tax base of a company is calculated independently from its partners, subsidiaries or shareholders.  

Value Added Tax (VAT)

The value-added tax applies to all business activities involving the supply of goods or trade. VAT registration in Saudi Arabia is mandatory for businesses and avoiding it may lead to legal troubles or penalties. The tax period for value-added services can either be monthly or quarterly. It is an essential practice for companies to calculate their vat taxes according to the tax rates and fulfil the payment requirements on time.

Withholding taxation

Withholding tax in Saudi Arabia are liable on payments made by a resident or permanent establishment of non-local resident towards services provided by a non-residential enterprise. It implies that withholding tax is applicable for any payment made for a service. The tariff includes all services except goods and properties. Withholding taxes should be settled within ten days of the month-end of initial payment.

Custom duties

Custom duty tax is subjected to import and export of goods or trade in Saudi Arabia. The tariff rate varies according to the products. There are no other taxes applicable on goods except the custom duty taxes. GCC countries, however, are exempted from customs duties. The Saudi customs authority mandates inspection on all products and ensures that they meet all the standard requirements.

VAT Registration Procedure in Saudi Arabia

VAT registration for businesses is mandatory and is regulated by the General Authority of Zakat and TAX (GAZT). The following are the steps for VAT registration in Saudi Arabia:

  • The first step is to register for a Tax Identification Number  (TIN) which can be obtained from the official portal of GAZT.
  • After registering for TIN, log in to the official website of GAZT using the same username and password used for obtaining TIN.
  • After logging in to the website, select VAT Registration on the portal and fill the application form.
  • Upload the relevant documents along with the application.
  • Once the application gets approved, VAT registration will be issued by the GAZT.

Benefits of Availing Tax Services in Saudi Arabia

Professional tax services are highly reliable and can provide help with tax laws and regulations. The following are some of the reasons to avail tax services in Saudi Arabia:

  • Ensures compliance with local tax laws
  • Offers a high level of accuracy
  • Reduces tax-related risks
  • Affordable charges
  • Extensive support and guidance

Why us?

Business Setup Worldwide provides companies with world-class business solutions. Our team of advisors have in-depth knowledge of business setup in Saudi Arabia. Emerging businesses must comply with local rules and regulations. Availing tax services will ensure compliance with Saudi tax laws and save time as well. We have a vast amount of experience with taxation and legal advisory. Our experts will provide guidance and extensive support at affordable charges. Contact us today for any queries regarding tax-related services.