Taxes - Accounting

Saudi Arabia

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Tax Rates | Accounting Rules

Tax Rates

Consumption taxes

Nature of the tax: There is no consumption tax or VAT or sales tax in Saudi Arabia.
Tax rate: There is no VAT or other similar sales (or consumption) tax in Saudi Arabia.
Reduced tax rate: There is no VAT or other similar sales (or consumption) tax in Saudi Arabia.
Other consumption taxes: Other consumption taxes are levied at the national level and the local level e.g. gasoline tax, aviation fuel tax, liquefied petroleum gas tax, petroleum tax, motor vehicle tax, etc.

Corporate taxes

Tax rate

On a non-Saudi's share in a resident company and on income derived by a non-resident from a permanent establishment in Saudi Arabia.	20% on income adjusted for tax
In case of Saudi shareholder.	2.5%
The tax rate on tax payers (both Saudi and non-Saudi) working in the exploitation of the natural gas sector.	30%
The tax rate on tax payers (both Saudi and non-Saudi) involved in production of oil and hydrocarbons.	85%

Tax rate for foreign companies: There is no VAT or other similar sales (or consumption) tax in Saudi Arabia.
Capital gains taxation: 20% capital gains tax is imposed on the disposal of shares in a residential company. However, as per the new tax regulations, the capital gains on disposal of shares on the Saudi stock exchange are exempt if the shares were acquired after 2004.
Main allowable deductions and tax credit: Bad debt, repairs, natural disasters, charitable donation, R&D expenses, etc.
Other corporate taxes: Capital duty, Payroll Tax, Real property tax, Stamp Tax are imposed on companies in Saudi Arabia. Additionally, Saudi companies of all types and companies owned by nationals of GCC (Cooperation Council for the Arab States of the Gulf) states that conduct business in the Kingdom, and shares of Saudis and nationals of GCC states in joint companies are subject to Zakat. Zakat is an Islamic direct tax on property and income levied at a flat rate of 2.5%.
Social Security (9% of the employee's salary) needs to be paid for Saudi employees, in addition accident insurance at 2% of salary needs to be paid for both Saudi and non-Saudi employees.
The tax rate on companies (both Saudi and non-Saudi) working in the exploitation of the natural gas sector is 30%, and those involved in production of oil and hydrocarbons is 85%.

Individual taxes

Tax rate

As for company taxes	20%
For a Saoudian national	2.5%
If working in the Natural Gas sector	30%
Involved in production of oil and hydrocarbons	85%

Allowable deductions and tax credit: Same as for companies. For details, visit: Department of Zakat and Income Tax.
Special expatriate tax regime: As for company taxes: 20%, 30% or 85% depending on the sector of activity.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the International tax treaties on the Income Tax website.
Withholding taxes: Withholding tax rates are 5% for dividends, 5% for interest and 15% for royalties. Reduced rates may apply when there is a double tax treaty.
Bilateral agreement: Saudi Arabia and Tunisia are bound by a double taxation treaty: no

Signed	Ratified	Enforced

Pour aller plus loin dans vos recherches nous vous proposons de connaître les taxes locales connaître les taxes locales qui s'appliquent à votre produit.

Sources of fiscal information

Tax Authorities: Zakat and Income Tax Department (ZITD)
Other domestic resources: The Saudi Network
Arab Net
Expatriate Financial Advice to Saudi Arabia
INFO-PROD RESEARCH (IPR)

Accounting Rules

Tax year

The taxable year starts from the date the taxpayer obtains a commercial registration but taxpayer may use a different financial year beginning on the 1st January and ending on the 31st December of each year for example.

Accounting standards

Saudi Arabia uses accounting standards issued by Saudi Organization for Certified Public Accountants (SOCPA). In case an issue is not covered by SCOPA standards, IFRS (International Financial Reporting Standards) standards are used. Banks operating in the Kingdom generally used IFRS.

Accounting regulation bodies

SOCPA
Saudi Accounting Society

Accounting reports

The companies need to maintain their accounting reports, especially 'balance sheet and ‘profit and loss account'.

Publication requirements

The ‘balance sheet' and ‘profit and loss account' need to be published every fiscal year. Many Saudi companies are making their financial reports available on internet.

Professional accountancy bodies

SOCPA

Certification and auditing

Only licensed auditors, recognised by Ministry of Commerce and Industry can perform auditing in Saudi Arabia.

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is an Islamic international autonomous non-profit corporate body that prepares accounting, auditing, governance, ethics and Shari'a standards for Islamic financial institutions and the industry.

Accounting news

EINNews.com
Saudia Online