Update on Saudi Zakat & Income Tax LawsICAP – KSA Chapter
27 January 2014
© 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
The change over the last decade or so
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Jurisdiction Until a decade ago Now
Saudi Arabia Majority local ownership required in all businesses
Except for trading, agriculture and real estate, businesses can be a 100% foreign owned
Trading, agriculture and real estate businesses can be up to 75% foreign owned
The rest of the GCC
Majority local ownership required in all businesses
Except for free zones (where restricted activities can be carried out), majority local ownership required in all businesses
© 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
Doing business in Saudi Arabia
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Recent Economy Rankings by the World Bank (covering 189 countries)(Source: http://www.doingbusiness.org/rankings)
Ease of Doing Business – KSA stands at No. 26
Protecting investors – KSA stands at No. 22
Ease of paying taxes – KSA stands at No. 3
© 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
Upsurge in Saudi budgetary spending over the last few years
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KSA expenditure budget over the last few years
FY 04
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
FY 11
FY 12
Human Resource Development 56
70
87
96
105
122
137
148
168
Transport & Communications 6
9
10
11
12
15
16
17
21
Economic Resource Development 7
11
12
14
16
22
29
33
36
Health & Social Development 18
23
27
31
34
40
47
52
61
Infrastructure Development 3
3
5
5
6
8
8
9
11
Public Administration and Other 50
52
63
62
63
79
92
94
111
© 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
Upsurge in Saudi business and Zakat / tax over the last few years
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DZIT revenues over the last few years (Amounts in SR billions)
© 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
Saudi Zakat & Tax system
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Areas of improvement
Consistency of approach
Filing exhibits with tax returns even if not applicable
Tax and Zakat payment receipts
Issuance of annual Zakat certificate
DZIT circulars and notifications
Appellate decisions
Fatawa
DZIT Website