- Home
- Tax Services in Saudi Arabia
Saudi Arabia VAT Registration
The Saudi Arabian tax framework is governed by the Zakat, Tax, and Customs Authority (ZATCA). It is designed to regulate corporate tax in Saudi Arabia, Zakat contributions, Saudi Arabia VAT registration, withholding tax obligations, and excise duties. Businesses operating in the Kingdom must fully comply with tax regulations to mitigate financial risk, avoid penalties, and optimize tax liabilities.
At Gatestone Group, we offer technical tax advisory, compliance monitoring, and regulatory reporting for businesses navigating corporate tax in Saudi Arabia, Saudi Arabia VAT registration, and withholding tax (WHT) obligations. Our services include tax registration, Zakat structuring, VAT return filing, and tax optimization strategies tailored to your business needs. Apart from tax services, we also provide business setup in Saudi Arabia and assist with obtaining premium residency in KSA, ensuring seamless entry and compliance for businesses and individuals looking to establish a strong presence in the Kingdom.
Regulatory Framework – Saudi Taxation & ZATCA Compliance
Saudi Arabia’s tax laws are governed by the following:
- Income Tax Law (Royal Decree No. M/1, 1425H) – Governs corporate tax in Saudi Arabia for foreign investors.
- Zakat Regulations (Ministerial Decision 2216, 1441H) – Defines Zakat contribution rules for Saudi and GCC-owned entities.
- Value-Added Tax Law (Royal Decree No. M/113, 1438H) – Regulates Saudi Arabia VAT registration and compliance.
- Withholding Tax Regulations – Defines WHT obligations for non-resident entities providing services.
- Customs & Excise Tax Laws – Applies to import duties, specific consumer goods, and special transactions.
Corporate Tax in Saudi Arabia
- Foreign-owned businesses are subject to a 20% corporate income tax on net taxable profits.
- Saudi and GCC-owned businesses are subject to Zakat rather than corporate tax in Saudi Arabia.
- Joint Ventures (JVs) with mixed ownership are taxed proportionally based on shareholder residency.
- Gross Revenue – Exempted income and deductible expenses = Taxable Income.
- Allowable deductions: Depreciation, operational costs, bad debts, and R&D expenditures.
- Non-deductible expenses: Fines, penalties, and expenses unrelated to business operations.
Note: Corporate tax filings must be submitted annually within 120 days of the fiscal year-end. Late submissions incur penalties of up to 25% of the due tax.
Zakat Obligations for Saudi & GCC-Owned Businesses
Zakat is an Islamic financial obligation that applies to:
- Saudi and GCC nationals own businesses in Saudi Arabia.
- Equity-based businesses, including sole proprietorships, partnerships, and listed companies.
Zakat Calculation Methodology
- Net Zakatable Assets x 2.5% = Annual Zakat Liability.
- Exemptions: Companies with foreign ownership elements are proportionally exempt.
- Deductible items: Short-term liabilities, shareholder loans, and retained earnings.
Saudi Arabia VAT Registration & Compliance
VAT is regulated under the Value-Added Tax Law (Royal Decree No. M/113, 1438H) and applies to taxable transactions across goods and services. Businesses must ensure Saudi Arabia VAT registration and compliance with ZATCA regulations to avoid penalties.
- Mandatory VAT Registration: Businesses with annual turnover exceeding SAR 375,000 must complete Saudi Arabia VAT registration.
- Voluntary VAT Registration: Businesses earning between SAR 187,500 – SAR 375,000.
- Exemptions: Some financial services, healthcare, and education transactions.
- Claimable Input VAT: Business-related expenses such as inventory purchases, capital expenditures, and operational costs.
- Non-Recoverable VAT: Entertainment expenses, motor vehicle purchases (except transport businesses).
- VAT: VAT is filed quarterly or monthly, based on turnover.
- Payment due dates: 30 days post-tax period.
- Non-compliance penalty: 5%–25% of unpaid VAT.
We provide expert services for businesses undergoing VAT registration KSA and VAT compliance audits.
Withholding Tax (WHT) – Non-Resident Business Considerations
WHT applies to payments made to non-resident entities providing services to businesses in Saudi Arabia.
Standard WHT Rates Under Saudi Tax Law
| Transaction Type | WHT Rate |
|---|---|
| Dividends | 5% |
| Interest Payments | 5% |
| Royalties & Licensing Fees | 15% |
| Consulting & Professional Services | 15% |
| Technical & Engineering Services | 15% |
Our tax consultants ensure full compliance with WHT obligations and handle all necessary filings under corporate tax in Saudi Arabia.
ZATCA Audit & Tax Compliance Risks
Common tax violations include
- Late VAT registration → Fines up to SAR 10,000.
- Underreported taxable income → Audit triggers & financial penalties.
- Incorrect corporate tax computation → Back taxes + fines.
How We Help
- Pre-audit risk assessment to identify compliance gaps.
- Corrective tax restructuring & voluntary disclosures.
Why Choose Gatestone Group for Tax Compliance in Saudi Arabia?
Start business in Saudi Arabia. a dynamic market offering multiple benefits:
We streamline the entire process of company formation in Saudi Arabia, ensuring full compliance with Saudi laws.
Ensure Full Compliance with Saudi Tax Regulations Today!
Stay compliant, optimize your tax strategy, and avoid penalties with expert tax solutions. Whether you need assistance with corporate tax in Saudi Arabia, Saudi Arabia VAT registration, or VAT registration KSA, we provide end-to-end support tailored to your business needs. Our team ensures seamless tax filings, ZATCA compliance, and financial efficiency so you can focus on business growth.