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Saudi Arabia - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
General tax rate is 20% Tax rate for Petroleum or gas related activities companies range from 30% to 85%.
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Taxe rate on long-term capital gains |
Long-term capital gains are treated as ordinary income and taxed at 20%
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Dividends are taxable at a 5% rate since the new tax law came into effect on 30 July 2004.
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Tax rate on branches |
Branches are imposed tax on profits made in Saudi Arabia.
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Income tax
Fiscal year |
The financial year begins on 1st January and ends on 31st December of each year.
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Income tax rate |
Saudis and GCC nationals are not subject to income tax. Foreign employees are not taxed on their wages and salaries. Self employed foreigners who are resident in Saudi Arabia are not taxed on income from non-Saudi sources but only on Saudi-source income. Wherever applicable, the tax rate is progressive from 5 to 30% and divided into 5 brackets:
| 0-6,000 SR* | 0 - 5% | | 6001-16,000 SR | 5% | | 16,001-36,000 SR | 10% | | 36,001-66,000 SR | 20% |
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Tax deductions or
other allowances |
There are several types of tax deductions for nonresidents on their income generated out of activities in Saudi Arabia. For more details, the concerned person has to get in touch with the Ministry of Trade and the local fiscal authorities.
In application of the article 10.1 of the agreement of non-double taxation; income, which a resident of Saudi Arabia gets from a liberal or other independent activities, is taxable only in Saudi Arabia. In this case, the taxpayer is required to withhold tax on a deemed profit basis and to remit the withheld tax to the DZIT when it files its own tax return. However, personal deductions are not deductible.
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VAT rates
Standard rates |
No VAT, indirect tax or sales tax exists in Saudi Arabia.
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Reduced rates |
There is no VAT in Saudi Arabia.
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Other important taxes
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Name of tax |
Rate |
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Religious tax called Zakat .
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The rate is 2.5% of capital employed.
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Accounting
Introduction
Saudi accounting rules are governed by the Ministry of Trade, which publishes an official guide about all the accounting practices.
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Obligations and publications
Companies in Saudi Arabia have at least to fill an accounting book and a projected balance sheet with annual results as well as a profit and loss account.
Certification and auditing
The external control of accounts must be givento a body of auditors chosen by the company.
Professionals and representative organizations
There is an accountant association in Saudi Arabia : the Saudi Organisation for Certified Public Accountants. ( SOCPA).
Comments
The role of committees is very important, especially the committee of audit.
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Useful links |
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For futher informations, please contact the SAGIA (Saudi Arabian General Investment Authority).
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Last modified in
January 2003
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