Establishments that are owned by the same partners, and the holding company and its affiliate establishments, which are owned by the same partners, may submit a unified zakat return.
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For the importers who do not have regular books and records, zakat shall be calculated according to their returns. If GAZT has information or evidences proving more than what is stated in their returns, GAZT resorts to assessment. When doing assessment, GAZT requests the zakat payer to submit a declaration of his internal and external (importation) purchases where the following rule shall apply whenever it demonstrates a bigger base than the one concluded from the zakat payer's return:
- First Year
Estimated Zakat Base = Estimated Capital + Net Profit of Imports as it may be:
Estimated Capital = Value of Imports ÷ 8
- Second Year
Estimated Zakat Base = Estimated Capital + Net Profit of the Second Year's Imports as it may be:
Estimated Capital = (First Year Imports + Second Year Imports) ÷ 8
- Third Year
Estimated Zakat Base = Estimated Capital + Net Profit of the Third Year's Imports as it may be:
Estimated Capital = (First + Second + Third Year Imports) ÷ 8
- Fourth and Fifth Years
The same method shall be applied.
The following conditions shall be observed:
- The net profit of general imports is estimated by multiplying the total general imports by the percentage fixed for each importation category, i.e. three and half percent (3.5%) for importers of livestock, fresh fish, vegetables and fruits; seven percent (7%) for foods (wheat, corn, flour, barley, millet, rice, sugar, beans, lentil, ghee, coffee, oils); and ten percent (10%) for other categories. In addition, a net profit of 15% is estimated for internal purchases.
- If it is found that the zakat payer has no internal or external purchases in any given year, the purchases of such year shall be considered zero and shall be taken into account when calculating the average.
- When calculating the zakat base for the zakat payer who is an importer, the following shall be observed:
A. If importation is concluded against a certain commission, calculation shall be made on the basis of such commission and the owner of the goods, in whose favor they were imported, shall be charged for such imports by adding them to his purchases and considering them when estimating his capital and profits.
B. For the establishment that has supply contracts with a state authority, zakat shall be estimated by adding the supply contracts profits or purchases profits, whichever is bigger, to the zakat payer's capital at the year subject of calculation.
C. This rule shall not apply to whoever imports only raw materials, fixed assets or their spare parts for use in his own activity. In this case, he shall be charged for his final product as per the rules applicable to the industrial activity. Moreover, this rule shall not apply to accidental importation for one time where the zakat payer shall be charged only for the profits according to the profit percentage of each importation category.
D. This rule shall not apply to the importers of currencies and gold alloys. They are charged on the basis of their capital as registered with the Saudi Arabian Monetary Authority. Profits are estimated by following the similar cases of those who keep regular books and records.
That part of the loan that has remained for a complete year shall subject to zakat.
GAZT accepts the settlement of accounts of small establishments, which activities do not require keeping regular books and records, using the estimative method. Zakat payer is classified as a small-sized one if he meets the following conditions:
A. He does not have any imports or contracts.
B. The number of commercial registers through which the establishment operates should not exceed five.
C. The number of establishment's workers should not exceed 10, if the business activity thereof is commercial only, and 30 for other activities (contracting, services or professions).
If an establishment is no longer classified as a small-sized zakat payer, it shall cease be treated as a small establishment and, accordingly, must keep regular books and records.
The following activities shall not be classified as small establishments even if they meet the above conditions:
- Wholesale traders.
- Gold and jewelry traders.
- Motorcar showrooms.
- Financial establishments and banking activities.
- Education services.
- Hotels and furnished apartments.
- Commercial agencies.
- Health activities and services.
GAZT is the entity responsible for collecting zakat from the establishments to which it is applicable. Zakat money is deposited in the account of the Undersecretary for Social Security at the Saudi Arabian Monetary Authority to be used for spending on eligible recipients. Donations made to such charitable associations are deemed as expenses that are deductible from the zakat base of the zakat payer who keep maintain accounts, provided that the documents supporting the same is submitted.
Bad debts are deemed deductible expenses subject to the following conditions:
- They have already been declared within the establishment's revenues at the year when revenues became payable.
- Bad debts should be resulted from the practice of the activity.
- The establishment provides a certificate issued by its chartered accountant to the effect that such debts are written off from the books by virtue of a decision by the authorized person.
- Debts are not payable by entities relating to the zakat payer.
- The establishment undertakes to declare the debts within its income whenever they are collected.
The salaries and allowances of the establishment owner - whether an individual establishment, a stock corporation or partnership - as well as the remunerations paid to the chairman, deputy chairman and members of the Board who are partners in the establishment are deemed deductible expenses on condition that the salaries and allowances of the establishment owner are registered with the General Organization for Social Insurance.
In terms of zakat, investments are addressed as follows:
- Investments in establishments inside KSA, in partnership with others, shall be deductible from the zakat base if they are subject to zakat imposition inside KSA. If investments in such establishments are not subject to zakat inside KSA, they may not be deducted from the base.
- Investments in establishments outside KSA, in partnership with others, shall be deductible from the zakat base provided that the zakat payer includes, within his zakat return, the zakat payable for such investments as per the rules stipulated under the zakat regulation and pays it to GAZT. In addition, the accounts audited by an approved chartered accountant in the investment company shall be attested by the official authorities and enclosed with the return. If such rules are not followed when calculating and paying zakat, the investments cannot be deducted from the zakat base.
- Investments - whether internal or external or of short or long term – in securities, bonds currencies, deposits or deferred transactions are not deductible from the zakat base.
The following categories, whenever they practice an activity with the intention of making profit either in the form of money or business, shall be subject to zakat:
- Natural Saudi persons who are residing in the Kingdom of Saudi Arabia (KSA) and GCC countries' nationals of the same status.
- Saudi establishments domiciled in the KSA where zakat applies to the shares of Saudi persons and GCC countries' nationals of the same status and to the shares of Saudi governmental authorities and corporations.
A limited liability company with a capital of SR 100,000 has earned SR 30,000 as profits. It has loans at SR 150,000 and net fixed assets at SR 80,000. How zakat is calculated for that company?
The standard method applied by GAZT in calculating zakat for the companies, which have regular accounts, is the method of equities (straight-line method) whereby fixed assets are deducted from the capital to which the credit items listed in the financial statements, for which one complete year has lapsed, are added. Accordingly, the zakat base for such company is as follows:
|Net Profit||30,000 SR|
|Minus net Fixed Assets||80,000 SR|
|Zakat Base||200,000 SR|
|Legal Zakat||5,000 SR|
So long as the establishment has an intention to sell before the completion of construction, then it may not deduct the land and the buildings constructed thereon from its zakat base. If it did not finalize the sale process, then the land shall be evaluated, upon the lapse of a complete year, at its current value and its zakat shall be paid.
Zakat applies to every activity that is carried out with the intention of making profit either in the form of money or business including, but not limited to, the following:
- Commercial activity of all forms including trading commodities and services.
- Investment activity of all types including investment in securities – whether long or short term or internal or external – as well as investment in commodities, services and trade shares.
- Industrial activity of all kinds including factories, laboratories and workshops.
- Service activity of all natures including financial services, liberal professions and trades; and renting, leasing, brokerage and agencies activities.
- Financial activities of all forms including banking, insurance and financing activities.
A holding company, and its wholly owned subsidiary companies whether they are registered inside or outside the KSA and whether they are a direct or indirect property, shall submit unified accounts and unified zakat return and it shall be charged on the basis of their results based upon one zakat base.
Employee's share in such funds may not be deducted from the zakat base.
All ordinary and necessary expenses required for the activity, whether they were already paid or still payable in order to reach the net result of the activity, are deductible subject to the following conditions:
- It should be an actual expenditure substantiated by supporting documents or other proofs that enable GAZT to verify them even if it is related to previous years.
- It should be related to the activity, not to personal expenses or other activities.
It should not be of capital nature. If capital expenses are included within the expenses, the result of the activity shall be amended and the capital expenditure shall be added to the fixed assets and addressed according to the regular percentages.
هل تحتسب غرامة التأخير عن فروقات الضريبة بموجب الربط النهائي المقررة بالمادة (77) من النظام الضريبي والتي هي بواقع 1% عن كل ثلاثين يوم تأخير من تاريخ إجراء الربط النهائي على الشركة أم من تاريخ نهاية المدة النظامية لتقديم الاقرار الضريبي المحدد بـ 120 يوم من نهاية السنة المالية ، وهل يوجد فترة محددة للهيئة لإجراء الربط لأن تأخرها في ذلك سوف يحمل الشركة غرامات أكثر في حال احتساب الغرامة من تاريخ المدة النظامية لتقديم الاقرار ؟
يتم احتساب غرامة التأخير على الضريبة غير المسددة وهي الناتجة عن الفرق بين ما سددته المنشأة في الموعد النظامي والضريبة المستحقة السداد بموجب أحكام النظام وتشمل التعديلات التي تجريها الهيئة والتي أصبحت نهائية حسبما هو وارد بالفقرة (2) من المادة (71) من اللائحة التنفيذية للنظام بما في ذلك الحالات المعترض عليها حيث تحتسب الغرامة من تاريخ الموعد النظامي لتقديم الاقرار حتى تاريخ السداد وذلك تطبيقاً لأحكام المادة (67) فقرة (3) من اللائحة التنفيذية للنظام ، ويحق للهيئة بإشعار مسبب إجراء أو تعديل الربط الضريبي خلال خمس سنوات من نهاية الأجل المحدد لتقديم الإقرار الضريبي عن السنة الضريبية ، كما يحق لها ذلك في أي وقت إذا وافقت المنشأة خطياً على ذلك تطبيقاً لأحكام الفقرة (أ) من المادة (65) من النظام الضريبي.
نعم ، تعد فروع المركز الرئيسي في الخارج المملوكة له بالكامل بمثابة مركز رئيسي للمنشأة الدائمة في المملكة لأحد هذه الفروع، وبالتالي فإن المبالغ التي تدفعها المنشأة الدائمة في المملكة لأي من فروع المركز الرئيسي بالخارج مقابل خدمات تخضع لضريبة الاستقطاع بنسبة 15% ، وإذا كانت تلك الدفعات تمثل أتاوات أو عمولات فإنها لا تعتبر ضمن المصروفات جائزة الحسم.
The unified VAt agreement for the GCC to introduce VAT came into application. In line with the framework, Saudi Arabia is introducing Value Added Tax (VAT) on 1st January 2018.
The introduction of VAT is a key part of the Kingdom's broader plan to improve fiscal sustainability and diversify government revenues. VAT will provide a stable and sustainable source of funds to support the country’s ambitious program of transformation, including investment in economic development, diversification and public services. This will have real benefits which will positively affect the public and businesses of all sizes across Saudi Arabia.
Yes - some sectors could be fully exempt and some could be partially exempt (based on the activity, the product could be exempt or standard-rated).
Yes, government supplies are subject to VAT and the businesses supplying the government are expected to charge them VAT and transfer it to GAZT. GAZT may (in the future) determine certain government bodies / charities / citizens / companies / farmers as exempt from paying VAT yet so far none has been designated.
This is determined based on the nature of the sale. If the seller is conducting an economic activity, the VAT applies, i.e. if an individual sells his car then there is no VAT. If the intermediary conducting the auction is not taking ownership of goods but just charging a commission, this is then treated as a service and the commission amount is VAT applicable.
Taxation will be based on the nature of goods and services provided by the taxable person according to the policy stated at GCC Agreement level as well as in the Implementing Regulations.
VAT will be introduced in Saudi Arabia on January 1st 2018.
Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is applied in more than 160 countries around the world as a reliable source of revenue for state budgets.
Soft drinks are beverages that contain carbonated water, concentrates, powders, gels and extracts that can be converted into soft drinks.
The person who obliged to submit the tax return shall pay the tax due for each two months within 15 days from the declaration date.
Energy drinks are beverages that contain stimulant items. It is known that energy drinks provide mental and physical stimulation.
The retail price is higher than:
- The final selling price of excise products to the consumer in the prescribed and declared form, or the seller of the products by the importer, plant or person obliged to pay the tax.
- According to the standard prices prepared by GAZT.
Tobacco products include all the items mentioned in Chapter 24 of the GCC Common Tariff (cigarettes- rolls of cigarettes).
It is the place where a licensee is allowed to produce, transfer, store, acquire or receive excise products under a suspended tax status.
- Soft drinks could lead to indigestion and blood pressure. They also contain caffeine and sugar. They also cause fragile and weak bones.
- Energy drinks contain large amounts of caffeine, taurine and sugar, which represent as a high risk, including the central nervous system, heart attack, nausea, vomiting, a significant decrease in calcium, blood pressure and diabetes.
- Tobacco products: Smoking damages the lungs and increases the risk of cancer, bronchitis, emphysema, cardiovascular disease, heart attacks and stroke. Smoking of pregnant women leads to high abortion rates and other health problems.
It is the situation where tax is not paid on products subject to excise tax. The tax suspension will be clarified by regulation.
A. Maintaining through public health through:
- Reducing the consumption of harmful goods.
- Paying consumers to reduce their consumption.
- Helping those who wish to quit consumption.
- Reducing consumption among children and young people.
B. Converting consumption of the community members to useful items.
C. Benefiting from the financial resources gained from Excise tax for useful projects and programs.
D. Reducing the medical treatment costs and compensating the state treasury for what it spends for providing health services to the affected people.
Yes, the mechanism will be determined later.
- As it is expected, the international experience proved that consumption of lower-income people (the largest category of the society) for harmful products will be declined after rising prices of this kind of products.
- Low consumption among young people, who are the main target of producing companies, through raising costs of these products.
- When the cost of harmful items will be raised, manufacturers will not find alternatives to exclude or reduce the proportion of harmful items in their products to avoid taxation of their products.
- Reducing the growth rates of tobacco and energy drinks imports.
- Control indicators in accordance with the WHO Framework Convention on Tobacco Control (FCTC), revealed that the Kingdom has not yet applied the requirement to raise its tax rates.
The refund of the tax paid could be requested in any of the following cases:
- export or re-export for business purposes outside the GCC region.
- Using excise items in producing others ones subject to Excise Tax System. The regulations will determine recovery procedures and any additional cases.
Saudi Arabia has worked to combat harmful products through several tracks including:
- Issuing an anti-smoking system by Royal Decree No. 572 dated 28/7/1436
- Raising awareness on the health, economic and social risks of harmful products such as tobacco, energy drinks and soft drinks.
- Treating people who wish to quit this kind of products through the anti-smoking program and the food balance program of the Health Ministry.
- Issuing regulations that create restrictions on consuming these products.
- Preventing the promotion of tobacco products and energy drinks.
- Calling on manufacturers to make warning labels on harmful product packs showing their possible health risks.
- Imposing financial penalties on those who violate regulations that aims to restrict consumption of these products.
- Compelling manufacturers to make warning statements on cans.
- Preventing to sell these products in schools.
- Licensing specialized associations to raise awareness on tobacco risks and supporting them financially and morally to communicate with all segments of the society.
- Finally, in accordance with international and regional agreements to reduce consumption, the tax was approved for consumers so as not to be available to many of them, especially the children.
Yes, Excise Tax includes all quantities provided to be consumed in the local market.
Approved by the Supreme Council of the States of the Gulf Cooperation Council (GCC) in late 2016 after deliberations that lasted for about 12 years, and ratified by the GCC countries in a framework agreement to be applied by each country after the approval of the relevant authorities in each country in accordance with their local laws.
There are strict financial penalties to be applied on evaders.
It is imposed on:
- Producers of harmful products within the Kingdom.
- Importers of harmful products to the Kingdom.
Excise tax is an indirect tax levied on selective goods at various stages in the supply chain. It can be applied on production, import or sale of the goods.
- Registration on GAZT’s website according to the approved forms.
- Obtaining licenses.
- Submitting a tax declaration according to the specified period.
- Payment within 15 days of the statutory date for submitting the declaration.
- 100% for tobacco products on retail sale price.
- 100% for energy drinks at retail sale price.
- 50% for soft drinks at the retail price.
- Late payment penalties apply.
- Delaying registration, submission or non-validity of the declaration or misleading statements.
Transfer pricing refers to the setting of prices for transactions conducted between related persons, including but not limited to the transfers of goods, services, loans and intangibles (intellectual property). Transfer pricing is not a new concept to the Kingdom’s income tax regime; Articles 63 and 64 of the Income Tax Law address transactions between related persons. However, to address Transfer Pricing in a more detailed and regulated manner, the Transfer Pricing Bylaws (“TP Bylaws”) were issued. The purpose of the Bylaws is to guide taxpayers in ensuring that their transactions with related persons are priced and structured as they would be had the transactions been with independent or unrelated persons (this is referred to as the Arm’s-Length principle).
The purpose of Transfer Pricing is to ensure that all transactions between related persons are priced on an Arm’s Length basis. Transfer Pricing is a concept used for taxation purposes; it is not in and of itself a tax (such as VAT). However, the underlying principle of Transfer Pricing (Arm’s Length) is one that should be followed when calculating taxable income (tax base). This is to ensure that profits are not shifted via related person transactions, thus ensuring that tax on profit is levied fairly. Any TP adjustment will lead to a recalculation of the corporate income tax base.
TP Bylaws are applicable to all persons considered taxpayers pursuant to the Income Tax Law (including mixed-ownership entities, the income of which is subject to corporate income tax to the extent attributed to shares owned by taxable person).
Generally, entities or persons that are subject only to zakat (i.e. 100% zakat payer) are not subject to the TP Bylaws. However, the Country-by-Country (“CbC”) reporting requirements are applicable to any entity or person regardless of whether that person or entity is subject to only income tax, zakat or both. In that respect persons subject to zakat are expected to comply with the Bylaws to the extent such persons are considered persons obligated to comply with the CbC obligations under the Bylaws.
Persons subject to the TP Bylaws are required to submit the controlled-transactions disclosure form along with their annual income tax declaration. This disclosure form is an electronic form that is part of the annual income tax declaration. In addition, taxpayers are required to maintain the following documentation, subject to some exceptions:
- Master File containing – generally- information on the global activities of the multinational enterprise group to which the taxpayer belongs. Taxpayers who carry out controlled transactions, the arm’s length value of which does not exceed SAR 6 million in a 12-month period are exempt from this obligation.
- Local File containing –generally- information on all the taxpayer’s controlled transactions. Taxpayers who carry out controlled transactions, the arm’s length value of which does not exceed SAR 6 million in a 12-month period, are exempt from this obligation.
- Country-by-Country (“CBC”) Report – where consolidated group revenue of a multinational enterprise group (“MNE Group”) exceeds SAR 3.2 billion, all persons belonging to such MNE Group and who, in accordance with the Bylaws are considered to be the entities obligated to submit the CbC Report, must submit the CbC Report to GAZT. Such persons must comply with this obligation whether they are subject to income tax, zakat or both in the Kingdom
The TP Bylaws are applicable to all taxpayers whose deadline for submitting the tax declaration is on or after 1st of January 2019. Without prejudice to GAZT's rights under the Income Tax Law to request information, documents, or perform an audit related to the years preceding the effective date of TP Bylaws. The tax declaration submission deadline for taxpayers who are subject to TP bylaws will be extended till 30 April 2019 as per the Administrative decision issued by His Excellency the Governor of General Authority of Zakat & Tax number ( 19008) of 24 Rajab 1440H. In case GAZT requests any information or documents in accordance with the TP Bylaws regarding the Master or Local files, the taxpayer must submit the required documents to GAZT within the time limit indicated in the request and that in all cases shall not be less than 30 days from the date of the request. GAZT may request the Master File and/or the Local File any time after date of declaration submission deadline. During the 2019 calendar year, all taxpayers will be given an extension of 60-days. Hence, taxpayers will have a minimum of (legal period in which taxpayers is required to submit the declaration + 30 days (minimum) from the request+ (60 days extension) from the end of taxpayer’s fiscal year to prepare and submit to GAZT if requested.
GAZT encourages the submission and maintenance of documentation in the official language to the extent it is reasonably possible
Unless expressly exempt in the Bylaws, all related-persons transactions are within the scope of the TP Bylaws regardless of the place of residence, nationality or domicile of the persons.
Under Article 3(C) of the TP Bylaws, the tax base of a permanent establishment is determined in accordance with the arm’s-length principle with respect to its related persons transactions.
GAZT is the authority in charge for the implementation and administration of all taxation matters in KSA, including transfer pricing. GAZT is responsible for issuing transfer pricing guidelines, enforcing Transfer Pricing Bylaws, administering transfer pricing filing and to undertake transfer pricing audits.
You are encouraged to engage continually with transfer pricing resources made available by GAZT in order to stay up to date with the latest details on transfer pricing. All information is available on GAZT’s website Further detailed information is provided in the TP Guidelines and FAQ page.
To determine comparability between controlled and uncontrolled transactions, the following factors should be considered:
- Characteristics of property or services transferred;
- Functional profile (i.e. functions performed, assets employed and risk assumed);
- Contractual terms;
- Economic circumstances;
- Business strategies; and
- Any other economically relevant aspect of the transaction.
Further details can be found in the TP guidelines
The arm’s length price of a controlled transaction is determined by selecting and applying the most appropriate Transfer pricing method that provides the most reliable measure of an arm’s length result under the given facts and circumstances. This may be done by applying the most appropriate method amongst the following methods explicitly mentioned in the Bylaws
1. Comparable Uncontrolled Price (“CUP”) Method.
2. Resale Price Method.
3. Cost Plus Method.
4. Transactional Net Margin Method (“TNMM”).
5. Transactional Profit Split Method.
Provided that the most appropriate method should be selected in light of the following factors:
1. Suitability and appropriateness of the methods for the transaction in hand.
2. Availability of reliable information for application of the method.
3. Degree of comparability required based on the method.
Method other than those designated as the ‘Approved Methods’ in the TP Bylaws may be used in certain situations, As per Article 6 of the TP Bylaws, other methods can only be used if any of the Approved Methods mentioned under Article 7 of the TP Bylaws are unreliable for the purposes of determining the arm’s length nature of transactions. Furthermore, any person wishing to use an alternative method must demonstrate that under the facts and circumstances, none of those Approved Methods provides a reliable measure of an Arm’s-Length result and that the alternative method satisfies the provisions under Article 6 of the TP Bylaws. As an example, other methods might include valuation reports in case of tangible/ intangible transactions undertaken by the taxpayer.
There is no specific order of preference for the application of the methods.
Yes, a taxpayer is allowed to combine two or more transactions if the transactions carried out under the same or similar circumstances are economically closely linked to one another or form a continuum such that they cannot reliably be analyzed separately to perform the comparability analysis.
Under Article 13 of the TP Bylaws, it is specified that only data that is available or can be made available to the public may be used in conducting comparability analyses. Hence, the taxpayer cannot use information that cannot be made available to GAZT and vice versa.
Local comparable data is preferred. However under Article 13(C) of the TP Bylaws, GAZT may allow the use of foreign comparable data in the absence of local comparables. In such case, the taxpayer must be able to demonstrate to GAZT that the foreign comparable data is consistent with the requirements set forth in Chapter Three of the TP Bylaws, and shall take into account the expected impact of geographic differences and other pertinent factors.
The tested party is that entity in the transaction to which a transfer pricing method can be applied in the most reliable manner and for which the most reliable comparable can be found. It will most often be the one that has the less complex functional analysis profile.
For application of TNMM, it is necessary to identify a Profit Level Indicator (“PLI”) that can act as an appropriate base to compare net profit margin of controlled transactions with uncontrolled comparables. PLIs are financial ratios that measure the relationship between profits and either costs incurred, revenue earned, resources employed or any other appropriate base. The use of a particular PLI depends on a number of factors, including the nature of the activities of the tested party, the reliability of the available data and the extent to which the PLI is likely to produce a reliable measure of income.
Taxpayers are required to perform comparability analyses on a triannual basis if there is no change in conditions and circumstances of the taxpayer and his controlled transactions.
The disclosure form must be submitted with the annual income tax declaration
Yes, all transactions with any Related Person whether natural or juridical and as defined in the TP Bylaws must be reported.
The language of the Disclosure Form will be similar to the language of the tax declaration as the Disclosure Form is part of the tax declaration.
Yes, the Disclosure Form should be submitted by every person having controlled transactions (as defined by the TP Bylaws), irrespective of their value.
Transactions of a different nature with the same related person or the similar transactions with different related persons must be entered in separate line items. However, a person’s transactions may be combined only if:
- The counter party to the transactions is the same related person; and
- The transactions are of the same type (services, financial, tangible or intangible); and
- the transactions are all of same nature (expense or revenue).
However, when allowed to aggregate transactions, netting is not permitted.
The value should be the actual price or value of the controlled transaction that is used in the calculation of the tax base (that is required to be based on the arm’s length price).
Together with the Disclosure Form, taxpayers must submit an affidavit from its certified accountant, declaring that the Transfer Pricing policy of the MNE is consistently applied in relation to the taxpayer in the Kingdom.
In the context of the Disclosure Form, business restructuring means internal reallocation of functions, assets, risks within an MNE. Relationships with unrelated persons may also be a reason for the restructuring and/or be effected by it. This includes but is not limited to termination or substantial renegotiation of existing arrangements. Therefore, if such circumstance take place during the year of tax filling it has to be reported
A taxpayer who has conducted controlled transactions during the year but the aggregated arm’s length value of which is less than the SAR 6 million in a 12-month period as indicated under Article 19 of the TP Bylaws may respond to question with “Not Applicable”.
Non-monetary or free of charge transactions are usually transactions for which consideration would have been paid had the transaction been conducted with a third party. Transactions without consideration between related persons are presumed to be not at arm’s length as it is expected that such a transaction would be for consideration if it were between independent parties.
Shareholding details including the names, jurisdictions and ownership percentages of individual shareholders are required for these fields.
Any person who directly owns 5% or more of the taxpayer’s listed shares must be listed down in the Disclosure Form separately.
CbC notification is a form that taxpayers must submit to provide information regarding the Ultimate Parent Entity and the entity that will submit the CbC Report on the group’s behalf. This notification is an integral part of the Disclosure Form.
Yes, the person who is part of a group that is required to submit the CbC report as per article 18 of the TP bylaws must file a notification form regardless of whether they are taxpayers or subject to zakat only.
This is a mandatory field and has to be filled accordingly along with the name of the reporting entity and the country in which it submits the report.
Generally, transfer pricing documentation consists of the following categories of documentation, along with the sufficient supporting documentation under each category, as applicable:
- Master file (as per Article 16 of the TP Bylaws)
- Local file (as per Article 17 of the TP Bylaws)
- CbC Report (as per Article 18 of the TP Bylaws)
There is no particular submission requirement of the Master File and Local File. However, they must be submitted to GAZT upon request within the time allowed by GAZT. Taxpayers must have sufficient documentation prepared at the time of submission of the Disclosure Form. Documentation relating to the controlled transactions shall be provided to GAZT upon its written request within the time specified in the request and which will in all cases be no less than 30 days after the date of such request.
The Master File must be kept up-to-date with recent information. If no change in the group structure would mean the relevant section in the Master File will remain unchanged. However, the taxpayer is responsible for determining whether all information contained in Master File reflects the most recent information pertaining to the group.
The threshold limits stipulated for the TP documentation applies on an annual basis and any entity falling below the threshold for a particular year is not required to maintain documentation for that year.
Such taxpayers must maintain and present to GAZT once requested, sufficient and adequate documents that prove that all the related persons transactions are done at the arm’s length as defined in the TP Bylaws.
Only the MNE Groups with consolidated group revenue exceeding SAR 3.2 Billion during the reporting year immediately preceding the current reporting year as reflected in its consolidated financial statements for such preceding fiscal year are required to file CbC Reports.
As per Article 18(A) of the TP Bylaws, each ultimate parent entity or surrogate parent entity of an MNE Group in KSA should file a CbC Report. Separately, a constituent entity that is not an ultimate parent of an MNE group could file CbC Report in KSA, if the criteria under Article 18(B) of the TP Bylaws are met. Further, where there are more than one constituent entity of same MNE group in KSA, the MNE Group may designate one of such constituent entities to file the CbC Report and notify GAZT that the filing is for all such constituent entities collectively.
Yes, the constituent entities including ultimate parent entity or surrogate parent entity shall notify GAZT about the identity and residence of the reporting entity (who will be submitting the CbC Report) and the country of submission by such entity. Such notification should be submitted with the tax declaration. Such notification form will be made as part of the annual tax/zakat declaration.
The CbC Report is required to be filed within 12 months after the last day of reporting year of the MNE group.
A portal will be made available to taxpayers who are part of an MNE group for filing their CbC Reports. A one-time registration will be needed on the portal, the details of which will be made available in due course.
The General Authority of Zakat and Tax complies with all confidentiality requirements under the laws and regulation, with strict internal policies and procedures in accordance with the provisions of the Income Tax Law
No. The information included in the CbC Report cannot be used as a substitute for a detailed transfer pricing analysis of individual transactions and prices based on a full functional analysis and a full comparability analysis. The information in the CbC Report on its own does not constitute conclusive evidence that transfer prices are or are not appropriate.
The statutory period of any income tax assessments are in accordance with the Income Tax Law.
Where the controlled transactions of the taxpayer do not meet the arm’s length requirement, the person involved in such controlled transactions must make the necessary adjustments to their tax base to make the results consistent with market conditions and report such adjustments (i.e. the new amount post adjustment) in their tax declarations to be submitted to GAZT.
Further, during a transfer pricing assessment, if GAZT determines that the controlled transaction is not at arm’s length, GAZT may direct the taxpayer to adjust the tax base or to reallocate and/or disregard results arising out of controlled transactions to reflect the arm’s length results.
As per Article 21 of TP Bylaws, a corresponding adjustment application format will be made available to taxpayers. The contents of the form and method of applying for corresponding adjustments shall be communicated as well.
All penalties and fines under the Income Tax Law are applicable to all income tax matters.
- Dashboard - New portal provides a service oriented view on new applications supporting taxpayer requirements. The services allow the taxpayer to interact with GAZT in a more efficient way.
- Enhanced Inbox - Taxpayer can access all sort of correspondences and notification services.
- Enhanced user experience - Interactive process, powerful themes are designed keeping in mind the user experience.
- Enhanced web content with updated knowledge database - The new portal is updated with latest legislations and notifications.
- New taxpayers need to first complete the Sign up process by clicking on "User Login" "Sign Up" and then enter their Sign up details
- After completing the Sign up process, users must fill the Registration application to complete their application for a TIN
You need to enter the License and / or CR of your main outlet in the sign up process
Registered taxpayers with TIN and portal IDs can proceed by clicking on user login and entering registered email ID and then the one time login password received in the Email.
You can correct the taxpayer type in the New Registration by selecting the relevant options.
You need to complete Sign Up process
You can regenerate your codes by clicking on the link to regenerate the login codes which is active every 5 mins.
Please contact AMER call center for assistance.
Completing your Sign up, is the first step towards registering with GAZT. After completing Sign up, every user needs to Login with the same Email ID used in Sign up as the username and then fill the Registration application.
Please contact AMER call center for assistance.
GAZT will now be capturing detailed information such as Activities, Permit details and Shareholder details etc.
Please use "Forgot Password" by clicking on "User Login" Forgot password.
Username is your registered email ID that you enter during Sign Up
GAZT needs your Saudi local mobile number first for completing Sign up process and then to receive your one Login codes every time you Log into the GAZT portal
Registered Email ID / mobile number can be changed in the registration information after logging into the taxpayer dashboard.
Taxpayer Type is determined with the help of a drop down list provided in the Sign up process.
To Sign in taxpayers must have a valid username either received on the previous portal or the Email ID used to Sign Up in the new portal.
You cannot complete the Sign up process without a Saudi mobile number.
No, you need to register only one time with all the details of the locations. You have to provide all these locations as Outlets in your registration form.
Yes, if you are not able to submit your New/update/Change of Registration form then you can save it as draft and can submit later.
Your form is automatically saved when you complete and move from the each of the section, but if you are logging out or browser is closed unexpectedly by you or because of any other reason then, details you entered in that section are not saved. So we advise you to save your work and do a proper logout from the portal before leaving.
You can add only one Commercial Registration in one outlet and can add more than one License in each outlet those are relevant to that outlet
Depending upon the issuing authority your CR/License checked for validation and if it is not found your will be given error. In such type of the cases please check your CR/License is correct or not and enter the correct one.
You can change your contact person by adding new person and delimiting existing person.
We are collecting correct and detailed information of the taxpayer in proper manner with required attachments to have proper information of the taxpayer to provide correct services at right time. So you need to fill-up the form with correct information and submit it.
Yes, you can add a new Contact person who is valid presently by clicking on add contact person button in main outlet.
The Registration process consists of multiple steps on the road map menu and next step is enabled only when all mandatory details are entered in each active step.
Yes, on the basis of your taxpayer type minimum two shareholder should be there from your business start date
This error occurs when
- the checkbox for "main activity" is not checked for any activity
- the checkbox for "main activity" is checked for more than one activity in the Outlet
- the main activity permit details are not saved into the respective permit table
All mandatory Permit details must be entered correctly and then saved into the respective permit table by clicking on "Add License" when License details are entered or "Add Activity" when CR details are entered.
Yes, you canât change your financial year end month and day if you are an individual and will be as below:
- If you are a Saudi individual, then your financial year end is exactly one year from your business start date and you canât change it.
- If you are a Non-Saudi individual and you are choosing âEstimated Methodâ for maintaining your financial records, then you will have only two of the below options to get your financial year end month and day.
- Exactly one year from your Business Start date or
- Exactly end of the year in which your Business is Started
Multiple outlets can be added by clicking on "Add Outlet" push button but this can be done only after saving the Main Outlet
- If you enter bank deposited date or amount then you need to complete the remaining fields and attachment as a proof, if you donât want to enter then remove these fields values to avoid the error.
- Contract release application is available on taxpayer dashboard in the requests section
Yes, you need to register with GAZT if you are doing business in KSA or have income from other than salary.
It is 11 digit number available on the top of return form along with Form name.
To submit form 09, there needs to be one form 06 submitted for any month during the billing period.
No limit for general attachments. Only one file allowed for specific attachments
Your registered details are shown in this step. If any information is incorrect, please file a change of registration form to update your information via the Registration details tile.
Return filing needs to be in sequential order. You can open the return of next year if the previous year return is in the Billed status.
This is due to internet connection. Please close the browser & re login
If the return is in the following statuses. It means your return is being processed by the GAZT:
- Under Batch process
- Parked in Amendment
- In Processing
- To be Approved
This issue is because of Chrome in-build PDF plugin. Disable it using below steps. Adobe has suggested solution https://helpx.adobe.com/livecycle/kb/xfa-forms-firefox-chrome.html Â for the same by disabling the "chrome PDF Viewer" plugin. Just copy the below URL in address bar of google chrome: chrome://plugins Then disable the below marked plugin
Please contact GAZT to get this return unlocked
No, please keep saving your data by clicking Save as Draft button after each step.
It is a waiting icon due to slow internet connection. Please wait while the page is loading.
These are different statuses of return forms with following purpose:
Based on taxpayer type & accounting method, Zakat or Tax return will be available with due date in "To be filed" status
The SADAD invoice number takes 1 to 2 minutes to be generated. Please wait & click refresh button. You can also visit GAZT website later on & check the invoice details.Invoice details will also be sent on your registered email id and your registered Saudi local mobile no. You can also download or view all the related correspondence letters from the Correspondence tile.
You can either click on either Back/Next button or directly click on step number available on road map.
Click on the return of a year in "To be filed" status to start the filing.
It is because your system screen resolution & browser zoom settings. Please reduce the zoom of your browser from settings.
Please visit your local branch or contact GAZT for this purpose.
Return for current period will be available once the end date of your tax period is complete.
Please check on the screen, there must be a field highlighted as red with a suggestion available as tool tip. Place the cursor on this red field to see the error.
After you receive a turnaround letter from GAZT, the return will be editable.
Click on "New monthly WHT return" Button & select period for which form 06 is required to be submitted. The Hijri / Gregorian period is determined based on your registration details.
Complete all the sections of the return to enable submit button. Click on "Validate" button to highlight the blank fields on the current step.
After you receive a turnaround letter from GAZT, the return will be editable.
You can delete return by clicking "Void" button when form 06 is in "Parked" status. If the return is submitted, then please contact AMER Centre.
You can upload the given type of files "DOC, DOCX, XLS, XLSX, PDF, JPG"
Yes, click on hyperlink of attached file name.
Except form 06 you can submit other returns with NIL liability.
Shows the due return and bills of a taxpayer due during current & next upcoming month.
User can request to GAZT using any of the following services by clicking "Create a Request" button:
- Request for filing deadline extension
- Request for reduction in advance payments
- Request to lift refund banned/suspension
- Request for scheduling the in-field audit
- Request for taxpayer transfer
- Request for certificate
- Request for escalation
- Request for installment plan
- Request for Contract Release
Complete history of correspondences sent to you is available here.
If a taxpayer has an excess amount as an advance paid to GAZT in his account, he can request for Refund. Similarly if he has an excess amount in one tax type account, he can get it transferred to another tax type account.
Login to with your User ID on portal and click on Refund/Transfer Request Tile. Then click on either of the tile Refund/Transfer. Then click on Create new Refund/Transfer Request Button. Fill the Request form and submit. GAZT will contact you to submit the original documents on the basis of which you are claiming the Refund/Transfer. If all the documents are correct you will get your Refund and Transfer done. You will receive the confirmation letter from GAZT.
The minimum amount for Refund is 250 SAR.
The minimum amount for Transfer is 15 SAR.
This issue is because of Chrome in-build PDF plugin.
Disable it using below steps.Adobe has suggested solution https://helpx.adobe.com/livecycle/kb/xfa-forms-firefox-chrome.html Â for the same by disabling the âchrome PDF Viewerâ plugin.
Just copy the below URL in address bar of google chrome:chrome://plugins.
Then disable the below marked plugin
Minimum browser requirements
The new e-services in GAZT portal are built on the award-winning SAP UI5 technology and require the use of a modern browser version.Using the e-services requires the use of one of the following browsers:
(most recent version)
Firefox (most recent version)
Safari (most recent version)
Internet Explorer 10 or above
Please note: You will be unable to access the new e-Services section of GAZT portal without one of the browser versions above. So it is vital that you upgrade your browser as soon as possible or use one of the alternative browser.
We also recommend you use zoom a screen resolution of minimum of 1028x768 pixels and minimum zoom level of 100% in browser.
A file system called cookies is used to track the user's progress through the site, making best use of your individual internet preferences. No personal data is stored using cookies.
Since cookies are maintained by your web browser, the method for enabling or disabling them will vary depending on which browser you are using. For more information on how to control and/or disable cookies please click here.
In order to view and download some of the documents available on this website you will require the free Adobe Acrobat Reader software. Adobe Acrobat is a file that enables you to download documents onto your computer whilst retaining their hard-copy format.
On the Adobe website choose your operating system, e.g. Windows 7 from the drop-down box. Make a note of where you have downloaded the file, then find it on your computer and double-click it. The installation programme will do the rest.
Installment plan request is available on taxpayer dashboard in the requests section.
Zakat Certificate request is available on taxpayer dashboard in the requests section.
Contract release application is available on taxpayer dashboard in the requests section