Saudi Arabia is a unique tax jurisdiction where companies based in the Kingdom are generally subject to two different tax regimes – Zakat and/or Income Tax – based on the nationality of their owners. Companies are also subject to Value-Added Tax (VAT), real estate tax, customs and duties, withholding taxes on foreign entities, and must address the issue of double taxation.

With recent reforms and increased use of IT, the Saudi tax authority is aiming to increase compliance with tax laws and regulations, reduce tax evasion, and improve the Kingdom’s alignment with international standards. These reforms include new auditing standards that require greater accountability and requirements to file detailed returns in a timely manner. They also include recent e-invoicing requirements aimed to improve the efficiency and transparency of the filing process for taxpayers.

AlGhazzawi & Partners understands the complexities of the Saudi tax system and how it applies to your unique situation. Sophisticated legal support is essential for you to navigate changes to tax law, regulation, auditing, and filing standards. For over 50 years, our tax practice has assisted clients with domestic and international corporate tax planning, litigation of tax-related cases, , and representation on industry and client-specific issues.

Experienced Legal Support for Complex Tax Challenges

There have been several recent changes to the Saudi tax regime which require careful consideration and special expertise:

• The Saudi Council of Ministers approved merging of the General Authority of Zakat and Tax (GAZT) and the General Authority of Customs to form the Zakat, Tax and Customs Authority (ZATCA) to bring greater visibility and efficiency to tax compliance.
• ZACTA has publishing detailed guidelines to increases clarity on Zakat, income tax, and VAT laws and regulations.
• ZATCA has also published e-invoicing requirements and standards that affect VAT invoices, debit notes, and credit notes.
• New requirements and tax rates were published for withholding taxes on payments to foreign entities.
• Establishment of the new Integrated Logistics Zone (ILBZ) as a special economic zone with zero corporate income tax on income earned from specific activities for up to 50 years.
• Signing of the OECD’s Multilateral Convention (MLI) to implement anti-tax treaty abuse BEPS measures and better align with existing double-tax treaties.
• Establishment of the Tax/Zakat Dispute Resolution Committee (DRC) and associated guidelines.
• Intention to address double-taxation on income through a new tax credit mechanism.
• New tax on real estate transaction values regardless of condition, shape, or use at the time of the disposal.
• Increases in the customs duty rates applying to a wide range of products.

As a result of this increasing complexity, all Saudi-resident and non-resident companies operating in the Kingdom, regardless of their ownership structure, can depend on our team for continuous and diligent tax advice. We offer sophisticated strategies from corporate tax structuring and planning through to resolving tax disputes with regulators and support during litigation. We can handle charges from regulatory bodies concerning delayed tax filings and provision of documents for less than expected revenues. You can expect full-service legal support for contentious and non-contentious issues. With our expertise and prompt action, we can help you structure your business for maximum tax efficiency and keep you onside with Saudi tax authorities.

With our Cooperation Agreement with Gowling WLG, we combine our extensive local knowledge with Gowlings’ global tax expertise. This allows us to serve our international clients seamlessly and provide them with efficient tax strategies that also address double taxation concerns.

About Our Tax Practice Group

We have handled many complicated tax issues for Saudi, GCC, and foreign clients. Our team has a range of experience with all manner of tax issues including tax planning for M&A, dispositions of business enterprises, capital markets transactions, mixed joint venture, tax planning for real estate transactions, and resolving complicated disputes between Saudi and non-Saudi partners over tax liabilities.

Notable tax matters include:

Assisting a national construction services company in filing an objection against assessments made by ZATCA) for the past (3) years.

Contact Our Tax Practice Group Legal Team

No matter the complexity or time-sensitive nature of the tax issue at hand, our legal team has the experience and knowledge to find apt solutions for your situation and resolve tax issues with urgency. With offices located in Jeddah, Dammam, and Riyadh, we provide tax services to domestic and international clients across the Kingdom. Contact us to book a consultation.