General Guideline

Corporate Income Tax Without prejudice to the applicable tax Laws in the Kingdom, established entities are obligated to file an annual tax return regardless of in case those given entities are exempted from tax. The taxpayer shall file a tax return for purposes of income tax within (120) days from the end of the year included in given tax return. This tax return shall include all income earned during the given tax period(14) given that Income earned from ineligible activities in addition to associated expenses and costs shall be calculated separately. And if an established entity does not separate profits earned from eligible income from those earned from ineligible income, then tax base shall be calculated according to the following equation: Calculated Tax Base= Tax base of an established entity x (ineligible income ÷ total income). (14) Article Sixty (60) of Income Tax Law, and Article fifty-seven (57) of Implementing Regulations of Income Tax Law. Amounts due of tax -if any- (as well as tax on income from non-prescribed activities) shall be calculated in accordance with the given Tax Return within (120) days from the end of taxpayer reporting year. The provisions of the expedited payments may apply in accordance with Income Tax Law and the Implementing Regulations thereof(15). The taxpayer who paid an excess amount shall be entitled to recover this given excess amount and receive a compensation amounting to (1%) for each (30) days, calculated after the expiration of (30) days since the submitted claim, and it shall continue to be applied till the given amount is refunded to the taxpayer(16). Withholding Tax The Income Tax Law and the Implementing Regulations thereof provide for the applicable obligations in connection with submission of monthly Withholding Tax Return and payment of respective withholding tax. The person obligated to Withhold Tax shall abide by the relevant requirements in connection with submission of monthly Withholding Tax Return and payment of respective withholding tax in accordance with the Income Tax Law and the Implementing Regulations thereof(17). The person obligated to Withhold Tax shall register with the Authority -in case that given person has not been registered at the Authority for zakat or income tax purposes- and submit the Withholding Tax Return that includes any paid amounts subject to withholding tax in given reporting month, in addition to any payments subject to the provisions and conditions of withholding tax incentives. The person obligated to Withhold Tax shall file Withholding Tax Return and pay the levied taxes- if any- within ten (10) days from the month came after the month where the beneficiary has received the amounts due. (15)Article seventy (70) of Income Tax Law, and Article sixty-four (64) of Implementing Regulations of Income Tax Law. (16)Article seventy-two (72) of Income Tax Law, and Article sixty-six (66) of Implementing Regulations of Income Tax Law. (17)Article Sixty-eight (68) of Income Tax Law, and Article sixty-three (63) of Implementing Regulations of Income Tax Law. In addition to submission of monthly Withholding Tax Return and payment of respective withholding tax, the person obligated to Withhold Tax shall also file an annual declaration no later than (120) days after the end of fiscal year of given taxpayer (person obligated to Withhold Tax), while taking into account the provisions stipulated under the Income Tax Law and the Implementing Regulations thereof in this regard. This annual declaration of withholding tax shall be considered as a summery or a brief overview of the monthly withholding tax returns filed throughout the year. Thus, the given taxpayer is not obligated to pay any additional amounts upon submission of annual declaration of withholding tax. It is worth to note that in this regard, and contrary to the monthly withholding tax returns, the submission of annual declaration of withholding tax is obligatory even the value of withholding tax mentioned in respective tax returns and declarations throughout the fiscal year amounts to zero(18). (18) Article Sixty-eight (68) of Income Tax Law, and Article sixty-three (63) of Implementing Regulations of Income Tax Law.