Saudi: Fines for 3 Types of Income Tax Related Violations for Foreign Firms
The Zakat, Tax and Customs Authority will slap fines on foreign firms for violations related to income tax. Fines will be imposed on foreign firms that delay in submitting returns or making payment of taxes or getting registered in the system.
The authority explained this in the user guide for the mechanism for the payment of income tax on foreign establishments. “In the event of fines or penalties, a payment invoice will be generated containing the invoice number and the amount due, and the taxpayer will be able to make payments via electronic banking services, or through an ATM.”
The authority allowed the payment of tax or fines via Mada cards for amounts of SR20,000 or less. It indicated that by paying the bill through the SADAD system, a zakat certificate will be issued automatically if there were no other financial obligations, and paying the bill is considered as an acknowledgement of the accuracy of the information furnished in the declaration.
The income tax rate on the tax base is 20 percent for each of the following activities: a resident capital company, a non-Saudi resident natural person who practices an activity, a non-resident person as a result of an activity he practices in the Kingdom through a permanent establishment, and taxpayers working in the field of natural gas investment.
As for taxpayers working in the field of oil and hydrocarbon production, the income tax shall be paid in the following rate: Fifty percent for the taxpayer whose total capital investments in the Kingdom amount to more than SR375 billion; 65 percent for the taxpayer whose total capital investments in the Kingdom amount to more than SR300 billion and up to SR 375 billion; 75 percent for the taxpayer whose total capital investments in the Kingdom amounted to exceed SR225 billion and up to the amount of SR300 billion, and 85 percent for the taxpayer whose total capital investments in the Kingdom amounted to not exceeding SR225 billion.
