Tax and Zakat in Saudi Arabia - Alnowaiser Law Firm

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Tax and Zakat in Saudi Arabia

Each individual or business person only aims to pay the amount of tax that the law requires. However, it is very important to follow the rules and to avoid penalties and investigations by the relevant departments in the Kingdom of Saudi Arabia. Our tax and zakat professionals can help you comply with tax and zakat regulations and complete the necessary returns with the ZATCA (Zakat, Tax and Customs Authority). We can handle any tax and zakat dispute and act on behalf of our clients with the ZATCA. As tax and zakat consultants, our services include the following:  Assisting clients in understanding the fiscal implications and requirements concerning their current or future operations in the Kingdom of Saudi Arabia  Assisting clients in the preparation of their annual Zakat and income tax filing package and submitting it on their behalf to the ZATCA;

What Is Zakat?

Zakat is a religious obligation that individuals and companies are liable to comply with by donating 2.5% or ¼ of their annual total saving of net worth.

Who Is Subject to Zakat and Income Tax?

Individuals that have an annual savings and businesses that reside in Saudi Arabia and engage in financial operations meant to generate profit or benefit, such as investments, services or commercial, industrial or financial activities and others etc., is subject to the Zakat obligation.

How Is Zakat Calculated?

Zakat is calculated under the following guidelines:

Zakat is determined as 2.578% of the net assessable wealth or the Zakat base (excluding net adjusted profits) + 2.5% of net adjusted profits if the Zakat base exceeds the net adjusted earnings attributable to Saudi and GCC national shareholders.
Zakat is determined at 2.5% of net adjusted earnings if the Zakat base is less than those profits.

What Is the Income Tax Rate in Saudi Arabia?

15% of the net adjusted earnings are subject to income tax.

WHT (Withholding tax) rates range 15% and 2.5% of the company’s basis for Zakat is taxed. The entity’s net value, as determined for Zakat purposes, is represented by the Zakat base.

How Khalid Alnowaiser Law Firm & Partners can help with your Tax and Zakat strategy?

Regardless of your organization’s needs, be it tax litigation, Zakat advisory or any other legal issue, our experienced and seasoned associate and counsels will assist you ensuring your compliance with Zakat, Tax and Customs Authority

Get in touch with Alnowaiser Law Firm today for all your zakat and taxation needs in Saudi Arabia

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