Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 2/20/2013

Saudi Arabia - Foreign investment, permanent establishment, withholding tax rules 

February 20:   There are certain requirements, including ones to obtain or renew an investment license, for foreign entities making investments in Saudi Arabia.

Also, companies conducting business in Saudi Arabia through a permanent establishment may be subject to Zakat, to income tax, or to both.


Companies conducting business transactions in Saudi Arabia need to be aware of the withholding tax rules, since withholding tax applies at different rates on payments made to non-resident parties by a resident or a permanent establishment of a non-resident from a Saudi Arabian source of income.


Lastly, the date for filing the annual tax / Zakat declaration for the year ended 31 December 2012 is Tuesday, 30 April 2013. No extensions are granted under current law.


Read a February 2013 report [PDF 999 KB] prepared by the KPMG member firm in Saudi Arabia: Saudi Arabia Tax and Zakat Alert (February 2013)


Covered in the KPMG report are the following topics:


  • Requirements to obtain a foreign investment license or its renewal in Saudi Arabia
  • Definition of PE creates uncertainty
  • Important reminders for annual tax and Zakat compliance
  • Growing pains for Saudi Arabia’s withholding tax
  • Saudi customs - Payment mechanism for imported goods
  • Treaty-based reductions only available by refund
  • New e-filing system
  • Saudi budget and economic developments 2013



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