Everything You Need to Know About Saudi Arabia’s Corporate Income Tax System
Struggling with corporate income tax registration in Saudi Arabia? Many businesses find it challenging to keep up with evolving tax compliance requirements. The arising legal risks for non-compliance with tax laws may result in penalties.
Accurate Accounting Solution offers a simple and hassle-free way to manage corporate income tax formalities in KSA. In this blog, you are going to learn everything important about income tax compliance. Let’s stay compliant and confident!
What is Corporate Income Tax in Saudi Arabia?
You are running a business in the Kingdom, and it is making a huge profit. The direct tax that is levied on the profits of your business is the Corporate Income Tax (CIT). Yes, for individuals, there is no income tax scheme there.
The standard income tax rate is 20%. The corporate income tax is governed by the Saudi Income Tax Law and is regulated by the Zakat, Tax, and Customs Authority (ZATCA). If your business is subject to CIT, you must register, file annual tax returns, and pay taxes within specified deadlines.
Who Is Subjected to Income Tax in Saudi Arabia?
- Resident Companies with Foreign Ownership.
- Non-Saudi Individuals Conducting Business in Saudi Arabia.
- Non-Resident Companies with Permanent Establishment (PE) in Saudi Arabia.
- Non-Residents Earning Saudi-Sourced Income.
- Natural Gas Investment Companies.
- Oil and Hydrocarbon Producers.
Corporate Income Tax Registration in Saudi Arabia: The Process
- Register your business with the Ministry of Commerce (MoC) and obtain a valid Commercial Registration (CR).
- Create an account on the Zakat, Tax and Customs Authority (ZATCA) online platform.
- Submit corporate income tax registration, providing all the business, ownership, and activity details.
- Upload required documents, including the CR, Articles of Association, shareholder details, identification documents, and financial information.
- Provide financial and contact details, including fiscal year details and bank information, registered address, and authorised signatory details.
- ZATCA reviews the application, verifying the submitted information and documents.
- Upon approval, your company will receive its Corporate Income Tax registration confirmation and TIN.
- File tax returns and make payments on time. Start ongoing tax compliance and maintain compliance to avoid penalties.
Penalties for Non-Compliance
Late Registration Penalty: It leads to financial penalties when failure occurs in registering for Corporate Income Tax with ZATCA within the prescribed time.
Late Filing of Tax Returns: Any delay in the submission of corporate income tax returns results in fines based on the delay period.
Late Payment Penalty: If you underpay or delay tax payments, they will be subject to monthly penalties. It is calculated as a percentage of the unpaid tax amount.
Flaws in Information: Any false, inaccurate, or incomplete tax information will be subjected to additional fines and legal consequences.
No Proper Records: Failure to maintain proper records may result in penalties during audits.
Tax Evasion Penalties: Illegal non-payment or underpayment of tax can lead to severe penalties. It includes heavy fines and possible business suspension.
Tax Assessment Revisions: Any non-compliance may lead to triggering tax audits, reassessments, and additional tax liabilities.
How Accurate Accountings Makes Corporate Income Tax Formalities Hassle-Free
Accurate Accountings offers complete assistance for your Income Tax Registration in Saudi Arabia. We have an expert team of professionals who are updated with ZATCA regulations and ensure full compliance with Saudi corporate income tax requirements. Whether it is the accurate calculation of taxable income or timely filing, we are highly reliable and pursue your task neatly.
When it comes to documentation, our experts prepare and review everything carefully, minimising errors and compliance risks. Trust us, we track every important deadline, ensuring no late filings and fines. No worries regarding the type of business structure, ownership, and industry; we offer tailored business services, simplifying complex tax procedures to be transparent and hassle-free.
Conclusion
Planning to start a company in Saudi Arabia? Your foreign-owned and non-resident business needs a corporate income tax filing in KSA. Any delay in registration or inaccuracy in tax filing leads to penalties and legal risks. Fines, audits, reassessments, and business disruptions can significantly impact your business productivity.
Accurate Accounting simplifies your tax registration documentation, filing, and ongoing compliance so you can concentrate on your business efficiently.
Ready to simplify your Corporate Income Tax Registration in Saudi Arabia? Consult Accurate Solutions today to make your CIT registration and maintenance accurate, hassle-free, and transparent.
Ready to start your business in KSA?