Tax consulting services involved in operating a Saudi company

To register a company in Saudi Arabia, it is very important to understand the local tax system. Clarifying the collection rules, scope and tax rates of different taxes will not only help companies plan their finances rationally and ensure compliant operations, but also effectively use tax policies to reduce operating costs and enhance market competitiveness. Next, let's take an in-depth look at the main taxes involved in running a Saudi company.

Saudi Company Operations Involving Taxes

1. VAT:

in accordance with the requirements of the GCC VAT Unification Agreement, Saudi Arabia promulgated the VAT Implementation Regulations approved by Zakat and General Administration of Taxation Resolution No. 3839 on September 5, 2017, stipulating that VAT will be levied from January 1, 2018 at a rate of 5%. In May 2020, Saudi Arabia increased the standard VAT rate from 5% to 15%.

2. Enterprise income tax:

the standard rate of corporate income tax in Saudi Arabia is 20% and applies to resident enterprises, non-Saudi resident natural persons and non-resident enterprises or non-resident taxpayers engaged in business activities through permanent establishments.

3. Consumption tax:

saudi Arabia has levied a consumption tax since June 2017, which targets special items such as tobacco products, soft drinks and energy drinks.

order the goods.

4. Zakat Tax:

the Zakat tax is a tax levied under Islamic law and is levied only on Saudi citizens, also known as "zakat". Taxpayers include all Saudi individuals, shareholders of companies in which all shares are held by Saudi citizens, and Saudi shareholders of Saudi-foreign joint ventures. The tax is based on all income, profits, dividends, bonuses and other income generated by all assets and business activities of the taxpayer, and the tax rate is 2.5 per cent.

Saudi Company Registration Process

obtain a Foreign Investment License (MISA):

apply for an investment license from the Saudi Ministry of Investment (MISA) and submit business plans, articles of association, parent company documents, etc.

2. Company name pre-approval:

support the online application on the Saudi Ministry of Commerce website, prepare multiple alternative company names, and ensure that the name conforms to the Saudi naming standards and does not overlap or resemble the registered company.

3. Business Registration:

register the company with the Saudi Ministry of Commerce and Industry and obtain a Business Registration Number (CR). This link includes the payment of registered capital and upload shareholder information.

4. Tax Registration:

apply for a Tax Number (TIN) from the Saudi Tax Authority (ZATCA) and register for VAT (if applicable).

5, bank account opening:

select a suitable bank, submit relevant documents for bank account opening procedures, and inject registered capital.

6. Registration of Chamber of Commerce:

register an account with the Chamber of Commerce for subsequent business activities.

7. Registration of the Ministry of Labor and the General Directorate of Social Insurance:

company registration with the Ministry of Labor in order to manage employees and comply with labor regulations.

Social insurance for employees at the General Directorate of Social Insurance (GOSI).

Zhuoxin Enterprise provides agency services such as domestic and foreign company registration, bank account opening, annual tax return, agency bookkeeping, trademark registration, ODI Overseas Investment Filing, etc. If you have any business needs in this area, please feel free to consult our online customer service!