The Minister of Finance in the Kingdom of Saudi Arabia (KSA) has issued Resolution No. 25 on 26 July 2023, which is effective from the date of publication i.e. on 15 September 2023, amending certain articles of the Tax by-laws and Zakat regulation.
- Interest Deduction :-Interest capitalized relating to capital assets is not to be considered in calculating limitation of interest expense.
- Unfunded liabilities:-means the amount of employer’s contribution to pension, social security or any other funds incorporated for employees end of service benefits or to compensate for the medical expenditures, as at the beginning of the fiscal year and that remains unpaid at the end of that fiscal year.
- Withholding tax :-The disparity in the rates for withholding tax between payments to related and unrelated parties has been removed.
- Withholding tax rate on payments to related parties has been reduced to 5% from 15% in respect of technical & consulting services and for international telecommunication services . Further, it clarifies that 5% withholding tax is applicable on international travels departing from KSA.