On 25 October 2023 , Saudi Arabia’s Zakat, Tax and Customs Authority (“ZATCA”) announced the Income Tax Law Draft and the Zakat and Tax Procedural Law Draft through the Istitlaa Portal. The Draft Zakat and Tax Procedural Law contains several significant provisions. In particular:
- Article 4 confers power to the Authority to access information to enforce Zakat and Tax laws.
- Article 9 sets guidelines for record-keeping.
- Article 16 identifies situations of Zakat or tax avoidance.
- Article 20 grants individuals the right to contest decisions issued by the Authority
In the proposed Income Tax Law, several key amendments have been proposed- addressing tax avoidance, revising withholding tax rates, offering special incentives, refining residency rules, and embracing , international standards, among other substantial revisions. Notably, the following withholding taxes has been proposed for the following payments:
- Dividends, rental payments, and interest payments: 5%
- Payments for Services: 10%
- Royalties: 15%