Zakat & Tax
One business faces the Authority on five fronts at once: a zakat base, a tax base, periodic VAT returns, withholding on every payment abroad, and a transfer pricing file covering related parties. Each front has its own deadlines, its own logic, and its own exposure — and an error in one surfaces years later as an assessment, not when you file. We handle all five together, because splitting them between providers is what produces the inconsistencies an examination starts from.
- Regulator
- Zakat, Tax and Customs Authority (ZATCA)
- Typical duration
- A zakat or income tax return typically takes one to three weeks from complete data, a VAT return a few days. The Local File and Master File take four to eight weeks because the benchmarking study is the long pole — which is why they start early, not when the request arrives. Examination and objection files follow the Authority's statutory timelines.
- We don't publish price lists
- A quote built on your case, with a written scope and a validity date
Hello. I can price an annual zakat and tax engagement right now — six questions.
Get your quote now and start right here
6 questions are enough for a number built on your case — not a range, and not a promise to call. And if your case needs a closer look, we say so plainly rather than guess.
Once you accept, your account opens on your mobile number and we continue from here: the statutory step, then documents, then the work begins.
Is this service for you?
- Saudi and wholly GCC-owned entities subject to zakat.
- Foreign or mixed-ownership companies subject to income tax on the non-GCC partner's share.
- VAT-registered businesses of any size.
- Businesses paying a non-resident — services, royalties, interest, rent, management fees — which triggers withholding tax.
- Businesses with related-party transactions inside or outside the Kingdom: branches, sister companies, a parent, or a controlling owner.
- Businesses that have received an examination or assessment letter and need a professional response within the statutory window.
When you need it
- After year-end: the zakat or income tax return, together with the disclosure form for related-party transactions.
- Periodically through the year: VAT returns, monthly or quarterly depending on your tax period.
- Monthly: remitting withholding tax on the prior month's payments to non-residents.
- When related-party transactions pass the statutory threshold: preparing the Local File and Master File and keeping them ready to produce on request.
- As soon as an examination letter or information request arrives — the clock runs from the notification date, not from the day you noticed.
- Within the statutory window to object to an assessment or penalty.
The tracks inside this service
Five separate obligations on five different clocks. Read the one you came for.
Zakat
- Who it binds
- Saudi and wholly GCC-owned entities, and the GCC partner's share in mixed-ownership companies.
- Statutory timing
- The zakat return after year-end, within the statutory window.
- Computing the zakat base: chargeable funding sources and the permitted deductions for long-term assets.
- Handling the recurring contentious items: loans, provisions, investments, and work in progress.
- Reconciling the base to the financial statements so no unexplained difference arises.
- Preparing and filing the return and obtaining the zakat certificate.
Income Tax
- Who it binds
- Foreign and mixed-ownership companies, branches of foreign companies, and oil and gas entities under their special regime.
- Statutory timing
- The tax return after year-end, with advance payments during the year where the conditions apply.
- Computing the tax base and the adjustments to accounting profit: non-deductible expenses, statutory depreciation, provisions.
- Treatment of carried-forward losses and the limits on carrying them.
- Permanent establishment: assessing whether a non-resident's activity creates one — among the most surprising sources of assessment.
- Applying double tax treaties where relevant, and obtaining tax residency certificates.
Value Added Tax
- Who it binds
- Every business whose taxable supplies exceed the mandatory registration threshold, and voluntary registrants.
- Statutory timing
- A monthly or quarterly return depending on your turnover, with payment due at the same time.
- Preparing the return from the books and reconciling it to accounting revenue — the gap between the two is the first thing examined.
- Reviewing supply treatment: standard-rated, exempt, zero-rated, exports, and intra-GCC supplies.
- Input tax: testing recoverability and documentation, and applying proportional deduction where exempt supplies exist.
- Reverse charge on imported services — a commonly missed item that reliably produces assessments.
- E-invoicing: checking invoices meet the requirements and resolving integration findings with the Authority's systems.
Withholding Tax
- Who it binds
- Every resident entity paying a non-resident, whatever the amount.
- Statutory timing
- Remittance in the first days of the month following payment, plus an annual consolidated return.
- Classifying each payment and its rate: services, management fees, royalties, interest, rent, dividends.
- Distinguishing general services from technical services and management fees — the classification most disputes turn on.
- Applying reduced treaty rates with the documentation the Authority accepts.
- Monthly returns and the annual return, and clearing arrears before their penalties compound.
Transfer Pricing
- Who it binds
- Every entity with related-party transactions, domestic or cross-border. The rules apply to tax payers and zakat payers alike.
- Statutory timing
- The disclosure form goes with the annual return. The Local File and Master File must exist in advance and be produced within a short window when the Authority asks — there is no time to write them after the request.
- Mapping related parties and controlled transactions, and establishing whether you cross the threshold that triggers the files.
- The disclosure form of controlled transactions, filed with the annual return.
- The Local File: characterising your transactions, the functions, assets and risks analysis, and selecting the method that supports arm's-length pricing.
- The Master File: the group picture — structure, intangibles, financing arrangements, and pricing policy.
- The country-by-country report and its notification, for groups above the consolidated revenue threshold.
- The benchmarking study the file rests on, and support when the Authority challenges it.
Deliverables
- Returns prepared, reviewed and filed on time, with a file showing the basis of every figure.
- A statement of the differences between accounting treatment and zakat or tax treatment — the first thing an examiner asks for.
- The disclosure form for related-party transactions, and the Local File and Master File where they are required.
- The benchmarking study that supports your related-party pricing being at arm's length.
- A reasoned response or objection memorandum with its regulatory basis, and representation before the Authority.
- A calendar of your upcoming statutory deadlines, with a reminder before each.
The checklist
This is the same checklist we send when you accept the quote — you can start assembling it now.
- Financial statements and trial balance for the year in question.
- ZATCA registration details and the authorised representative's mandate.
- Sales and purchase listings with invoices for the tax period, and the e-invoicing file.
- Schedule of payments to non-residents, the underlying contracts, and tax residency certificates where available.
- Ownership and group structure, and a list of related parties inside and outside the Kingdom.
- Contracts governing related-party transactions and the pricing policy applied to them.
- Prior returns and assessments and any correspondence with the Authority.
How the engagement runs
- 01
Reviewing where you stand
We review prior returns, open assessments, the ownership structure and related-party transactions, to see what must be fixed before the next filing rather than after it.
- 02
Preparation and reconciliation
We prepare each return from the books and make the required zakat and tax adjustments, documenting the basis of each one.
- 03
Consistency across the files
We reconcile VAT to revenue, withholding to foreign-paid expenses, and the disclosure form to the books — an inconsistency between two files is what most often opens an examination.
- 04
Review and submission
The partners review before submission; we then file through the Authority's portal and hand you the acknowledgments.
- 05
Follow-up and representation
We follow up any subsequent query or examination and represent you in responses and objections until the file closes.
Common questions
When do the transfer pricing files actually apply to me?
The disclosure form applies to anyone with related-party transactions. The Local File and Master File are tied to crossing a statutory threshold on the aggregate value of your related-party transactions for the year. The practical point: the threshold is measured on the aggregate, not per transaction, and many businesses cross it without noticing because they leave out shareholder loans and management fees from the parent.
Do the transfer pricing rules apply to zakat payers?
Yes. The rules were first aimed at income tax payers, then extended to cover zakat payers as well. Family businesses and Saudi groups that transact among themselves are the most affected by that extension, and many have not started preparing.
What is the difference between the Local File and the Master File?
The Local File is about your entity: what your related-party transactions are, which functions you perform and risks you bear, and how you demonstrate your pricing is at arm's length. The Master File is about the group: its structure, where its intangibles sit, how it finances itself, and its overall pricing policy. You prepare the first; the parent usually prepares the second and you need to obtain it — something worth arranging with the group early.
I received a large assessment — can it be reduced?
Often yes, where the assessment rests on an estimate or on a treatment that documents can rebut. The decisive condition is moving within the statutory objection window; after it lapses the options narrow sharply, however strong your position.
Do you handle e-invoicing?
Yes, on the compliance side: checking that your invoices meet the requirements, resolving integration findings with the Authority's systems, and coordinating with your technical solution provider. We don't sell a technical solution; we make sure the one you have satisfies the requirement.
Do you represent clients before the committees?
We prepare the objection file and its memoranda and represent the entity through the appeal stages as far as the regulations permit, coordinating with legal counsel where that is needed.
Related reading
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