Tax & Zakat
This is the heading
Income Tax:
Income tax is applied to resident capital companies on the shares of non-Saudi partners in them, whether they are natural or legal persons, residents or non-residents. The provisions of the law also apply to non-resident persons, whether natural or legal, Saudis or non-Saudis, who practice the activity. In the Kingdom through a permanent entity there, or they generate income from sources in the Kingdom , Income tax is imposed at a rate of 20% on the profits of the foreign or invested company.
Value Added Tax (VAT):
- Thorough Risk Assessment: Identifying potential threats and vulnerabilities to develop proactive strategies.
- Continuity Planning: Crafting tailored continuity plans to mitigate risks and ensure business operations remain uninterrupted.
- Testing and Training: Conducting regular drills and training sessions to validate and enhance readiness for crisis scenarios.
- Continuous Improvement: Engaging in ongoing monitoring and updates to adapt to evolving threats and improve BCM effectiveness.
Withholding Tax:
It is a direct tax deducted from the amounts received by a non-resident from a source in the Kingdom The withholding tax began to be implemented in 2004. The value of the withholding tax ranges between 5-20%, and its basic condition is that the source of income be from the Kingdom of Saudi Arabia.
Zakat:
It is a tax imposed by the government and applied to companies owned by Saudis and some other countries in the Gulf region, based on the amount of wealth possessed by those companies, and this includes companies owned by Saudis or citizens of the Gulf Cooperation Council countries. In mixed companies with Saudi (or Gulf) and non-Saudi investors, the taxable income of the non-Saudi investors is subject to income tax while the Saudi partner’s share is subject to zakat. Zakat is calculated based on the net wealth of the business, referred to as the “Zakat Base”, and the amount of Zakat due is 2.5% of the Zakat Base according to government regulations.
Tax and zakat objections:
Individuals and companies can submit objections if they are dissatisfied with tax estimates or there is an error in calculating the amounts due. The person or company must submit their objection within a certain period of time after receiving the tax or zakat notification. The objection is examined and the documents and data submitted by the taxpayer are reviewed, and the General Authority of Zakat and Income takes a decision based on the evidence provided. Through which taxpayers can review the tax and zakat assessments that were imposed on them, and their rights are guaranteed to enjoy fair treatment in accordance with Saudi regulations and laws.