Withholding Tax

Withholding Tax Registration.

In Saudi Arabia, withholding tax is a tax that is deducted from payments made to non-resident entities or individuals for certain types of income. If you are a non-resident entity or individual receiving income from Saudi Arabia, you may be required to register for withholding tax.

Here are the details on withholding tax registration in Saudi Arabia:

  1. Eligibility: Non-resident entities or individuals who receive income from Saudi Arabia are required to register for withholding tax if they are engaged in certain types of activities, such as providing services or selling goods.
  2. Online registration: Withholding tax registration in Saudi Arabia is done online through the Zakat, Tax and Customs Authority (ZATCA) website. You will need to create an account on the website and provide information about your business.
  3. Required documents: You will need to provide the following documents during the registration process:
  • Commercial registration certificate
  • Articles of association
  • Identity documents of the business owner
  • Bank account details
  • Tax identification number (if applicable)
  1. Withholding tax certificate: Once your application is approved, you will receive a withholding tax certificate from ZATCA. This certificate is proof that you are registered for withholding tax.
  2. Withholding tax deduction: The payer of the income will be required to deduct withholding tax from the payment and remit it to ZATCA on behalf of the non-resident entity or individual.

It is important to note that failure to register for withholding tax or to comply with withholding tax regulations can result in penalties and fines. Therefore, it is important to ensure that you are properly registered for withholding tax and that you comply with all withholding tax regulations in Saudi Arabia.

 

  • Withholding Tax filing

In Saudi Arabia, businesses that are registered for withholding tax are required to file withholding tax returns on a regular basis. Here are the procedures for withholding tax filing in Saudi Arabia:

  1. Determine withholding tax filing period: The first step in withholding tax filing is to determine the withholding tax filing period. This can be monthly, bi-monthly, or quarterly, depending on the business’s annual revenue.
  2. Gather required information: To file a withholding tax return, you will need to gather the following information:
  • Total payments subject to withholding tax for the filing period
  • Amount of withholding tax deducted from payments.
  • Any corrections or adjustments to withholding tax.
  1. Complete withholding tax return: Using the information gathered in step 2, complete the withholding tax return form provided by the Zakat, Tax and Customs Authority (ZATCA). The form can be completed online through the ZATCA portal.
  2. Submit withholding tax return: Once the withholding tax return form is complete, submit it to ZATCA through the online portal. The deadline for withholding tax return submission is the end of the month following the end of the filing period.
  3. Payment of withholding tax liability: If there is a withholding tax liability, it must be paid to ZATCA by the withholding tax return submission deadline. The payment can be made online through the ZATCA portal.

It is important to note that failure to file withholding tax returns or to pay withholding tax liabilities on time can result in penalties and fines. Therefore, it is important to ensure that your withholding tax returns are filed accurately and on time, and that you comply with all withholding tax regulations in Saudi Arabia.

 

 

 

  • Annual withholding tax filing.

In Saudi Arabia, businesses that are registered for withholding tax are required to file an annual withholding tax return in addition to the regular periodic returns. Here are the procedures for annual withholding tax filing in Saudi Arabia:

  1. Determine the annual withholding tax filing period: The annual withholding tax return should be filed within 120 days from the end of the fiscal year.
  2. Gather required information: To file the annual withholding tax return, you will need to gather the following information:
  • Total payments subject to withholding tax for the fiscal year
  • Amount of withholding tax deducted from payments
  • Any corrections or adjustments to withholding tax
  1. Complete the annual withholding tax return form: Using the information gathered in step 2, complete the annual withholding tax return form provided by the Zakat, Tax and Customs Authority (ZATCA). The form can be completed online through the ZATCA portal.
  2. Submit the annual withholding tax return: Once the annual withholding tax return form is complete, submit it to ZATCA through the online portal. The deadline for the annual withholding tax return submission is within 120 days from the end of the fiscal year.
  3. Payment of any withholding tax liability: If there is any withholding tax liability identified in the annual withholding tax return, it must be paid to ZATCA by the annual withholding tax return submission deadline. The payment can be made online through the ZATCA portal.

It is important to note that failure to file the annual withholding tax return or to pay any withholding tax liabilities on time can result in penalties and fines. Therefore, it is important to ensure that the annual withholding tax return is filed accurately and on time, and that you comply with all withholding tax regulations in Saudi Arabia.

 

  • Audit withholding Tax.

If your business is subject to a withholding tax audit in Saudi Arabia, it is important to be prepared to handle the audit process. Here are some general steps to follow when dealing with a withholding tax audit:

  1. Review withholding tax compliance: Before the audit, review your business’s withholding tax compliance. Ensure that all withholding tax returns have been filed on time, and that all withholding tax liabilities have been paid. Make sure that all supporting documents, such as contracts, invoices, and receipts, are in order and readily available.
  2. Respond to the audit request: When you receive an audit request from the Zakat, Tax and Customs Authority (ZATCA), respond promptly and provide all the requested documents and information. The request will specify the time and date of the audit, the auditor’s name, and the information required.
  3. Cooperate with the auditor: During the audit, cooperate with the auditor and provide all necessary information. Be transparent and open about your business’s withholding tax practices and answer any questions the auditor may have.
  4. Address any issues identified: If the auditor identifies any issues with your business’s withholding tax compliance, address them promptly. Work with the auditor to resolve any discrepancies or issues.
  5. Consider appealing the audit result: If the audit results in a finding of non-compliance and you disagree with the result, you can appeal the decision to ZATCA. The appeal must be filed within 30 days of the date of the audit report.

It is important to note that failing to comply with withholding tax regulations or failing to cooperate with an audit can result in penalties and fines. Therefore, it is important to take withholding tax audits seriously and to be prepared to handle them in an appropriate manner.

 

  • ZATCA assessment.

If your business is subject to a withholding tax audit in Saudi Arabia, it is important to be prepared to handle the audit process. Here are some general steps to follow when dealing with a withholding tax audit:

  1. Review withholding tax compliance: Before the audit, review your business’s withholding tax compliance. Ensure that all withholding tax returns have been filed on time, and that all withholding tax liabilities have been paid. Make sure that all supporting documents, such as contracts, invoices, and receipts, are in order and readily available.
  2. Respond to the audit request: When you receive an audit request from the Zakat, Tax and Customs Authority (ZATCA), respond promptly and provide all the requested documents and information. The request will specify the time and date of the audit, the auditor’s name, and the information required.
  3. Cooperate with the auditor: During the audit, cooperate with the auditor and provide all necessary information. Be transparent and open about your business’s withholding tax practices, and answer any questions the auditor may have.
  4. Address any issues identified: If the auditor identifies any issues with your business’s withholding tax compliance, address them promptly. Work with the auditor to resolve any discrepancies or issues.
  5. Consider appealing the audit result: If the audit results in a finding of non-compliance and you disagree with the result, you can appeal the decision to ZATCA. The appeal must be filed within 30 days of the date of the audit report.

It is important to note that failing to comply with withholding tax regulations or failing to cooperate with an audit can result in penalties and fines. Therefore, it is important to take withholding tax audits seriously and to be prepared to handle them in an appropriate manner.