What is included:
Cost: on request.
For tax purposes in Saudi Arabia, a company is considered local provided that it is legally registered without violating the law. That is the general rule. Local companies are those that have their own headquarters inside the country.
Local companies pay taxes on profits made within the country. This fact greatly attracts investment in Saudi Arabia.
Foreign companies having a branch or representative office in Saudi Arabia are required to pay taxes on income received from these branches and representative offices.
Base tax is corporate income tax. The standard rate is 20%. The same rate applies to foreign enterprises.
Natural gas companies also pay tax at a rate of 20%. Other obligations for companies that produce oil (as well as hydrocarbons).
Depending on their capital investments, it is determined at what rate the latter will pay taxes.
What is capital investment? Legislatively is the total aggregate value of fixed assets. When calculating this amount, two categories of funds are taken into account.
Material means are equipment, production lines, vehicles, etc. Intangible assets, including exploration, drilling and development expenses.
Value added tax applies to most well-known goods and services. There are, of course, exceptions.
The exclusion group included insurance services, some types of financial services, as well as rental of residential real estate.
Separately, it is worth noting the service sectors that are exempt from VAT, only on condition that they are provided to citizens of Saudi Arabia. Among them are medical and educational services.
Citizens of Saudi Arabia also have the right to exemption from VAT, but we are not interested.
The standard VAT rate is 5%. Some goods and services have a 0% rate, in accordance with the Gulf Cooperation Agreement of the Arab States, which sets out some mandatory areas for a 0% rate in all six Member States.
The amount of annual turnover with which registration of VAT status is required is equal to SAR 375,000. Foreigners providing tax-free supplies to tax-free customers in Saudi Arabia must register through tax representatives.
They have 30 days from the moment of the first delivery.
The accounting department of the company must compile quarterly, annual financial reports and provide declarations to the tax service. Contact us for more information.