In the Kingdom of Saudi Arabia, the income tax is applied to individuals, companies, and institutions in accordance with the Income Tax Law issued by Royal Decree No. (M\/1) dated 1\/1\/1425 AH (corresponding to 22\/2\/2004).<\/p>\r\n
Let\u2019s explore how to file the Income Tax Return in Saudi Arabia, what constitutes the taxable base, and applicable tax rates.<\/p>\r\n
Filing the Income Tax Return is mandatory for the following:<\/p>\r\n
A. A resident capital company with non-Saudi partners.<\/p>\r\n
B. A non-Saudi resident natural person engaged in activities within the Kingdom.<\/p>\r\n
C. A non-resident individual conducting business in the Kingdom through a permanent establishment.<\/p>\r\n
D. A non-resident earning taxable income from sources within the Kingdom.<\/p>\r\n
E. Any person engaged in natural gas investment activities.<\/p>\r\n
F. Any person involved in oil and hydrocarbon production.<\/p>\r\n
A. For a resident capital company, the taxable base is the share of income attributable to non-Saudi partners, after deducting allowable expenses as per the law.<\/p>\r\n
B. For a non-Saudi resident individual, the taxable base is their income generated within the Kingdom, after deducting recognized expenses.<\/p>\r\n
C. For a non-resident individual operating through a permanent establishment, the taxable base is the income from the activities of that establishment, minus deductible expenses.<\/p>\r\n
D. The taxable base for a natural person is calculated independently.<\/p>\r\n
E. The taxable base for a capital company is calculated independently from its shareholders or partners.<\/p>\r\n
For detailed guidelines, you can refer to the official Zakat, Tax and Customs Authority (ZATCA) website.<\/strong><\/a><\/p>\r\n A. The tax rate on the taxable base for a resident capital company, a non-Saudi resident individual, and a non-resident operating through a permanent establishment is 20%<\/strong> of taxable income.<\/p>\r\n B. The tax rate for those investing in natural gas is 30%<\/strong>.<\/p>\r\n C. The tax rate for entities engaged in oil and hydrocarbon production is 85%<\/strong>.<\/p>\r\n A. The fiscal year aligns with the state’s financial year.<\/p>\r\n B. A taxpayer may adopt a different 12-month period subject to regulatory conditions.<\/p>\r\n C. If the taxpayer changes their fiscal year, the period between the last complete tax year and the new one is treated as a short and separate fiscal period.<\/p>\r\n Taxpayers must pay their due taxes as declared in the Income Tax Return within 120 days<\/strong> from the end of their fiscal year.<\/p>\r\n A. Taxpayers with annual revenues exceeding SAR 2 million must pay in three advance installments on set dates.<\/p>\r\n B. Installments are calculated based on a percentage of unpaid taxes. The amount can be reduced if the current year\u2019s income is significantly lower than the previous year’s.<\/p>\r\n C. Paid installments count as partial payments toward the total tax liability for the year.<\/p>\r\n A. A penalty of 1%<\/strong> of total revenues (up to a maximum of SAR 20,000) is imposed for failure to comply with the Income Tax Return filing requirements.<\/p>\r\n B. Delays in filing result in increased penalties depending on how late the submission is.<\/p>\r\n C. Penalties are based on the unpaid tax difference and are subject to the same collection and enforcement procedures as the tax itself.<\/p>\r\n\r\n Read also:<\/strong><\/p>\r\n \u062a\u0642\u062f\u064a\u0645 \u0627\u0642\u0631\u0627\u0631 \u0636\u0631\u064a\u0628\u0629 \u0627\u0644\u062f\u062e\u0644<\/p>\n","protected":false},"author":16,"featured_media":3703,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"default","_kad_post_title":"default","_kad_post_layout":"default","_kad_post_sidebar_id":"","_kad_post_content_style":"default","_kad_post_vertical_padding":"default","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[840],"tags":[1284,1093,849,1358,1441],"class_list":["post-4781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-accounting","tag-auditing","tag-chartered-accountant","tag-income-tax","tag-taxes"],"_links":{"self":[{"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/posts\/4781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/comments?post=4781"}],"version-history":[{"count":4,"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/posts\/4781\/revisions"}],"predecessor-version":[{"id":5483,"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/posts\/4781\/revisions\/5483"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/media\/3703"}],"wp:attachment":[{"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/media?parent=4781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/categories?post=4781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bpcpasa.com\/en\/wp-json\/wp\/v2\/tags?post=4781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Income Tax Return and Applicable Tax Rates<\/h3>\r\n
The Fiscal Year<\/h3>\r\n
Filing the Income Tax Return and Tax Payment<\/h3>\r\n
Payment in Advance Installments<\/h3>\r\n
Penalties<\/h3>\r\n
\r\n