Version 3 | September 2023

What is a Tax Ruling and when does ZATCA issue Tax Ruling? The request for a Tax Ruling request is a mechanism used by the taxpayer or taxable person to request a reliable opinion by ZATCA on the interpretation of the provisions of the laws and implementing regulations applicable in the Kingdom regarding VAT or income tax (including the withholding tax), on issues related to its economic activity it is currently operating or planning to commence. When the Authority receives a request for a Tax Ruling, it will initially review the request to assess whether or not it is appropriate to provide a Tax Ruling in this matter, taking into account the following factors: The degree of complexity of the matter and the information available to the applicant. The relative importance of the transactions or activity subject to Tax Ruling request. If the information provided in the application is adequate. The extent to which the Public Tax Ruling request would be beneficial, if applicable. Availability of the resources and information required by ZATCA to respond to the request. Weather or not the applicant provided ZATCA with incorrect information when applying for a Tax Ruling. ZATCA may also decide to issue optional Tax Ruling at its discretion, not in the form of a response to a previous Tax Ruling request, but rather a general explanation on a matter that ZATCA believes will be beneficial to taxpayers if published. 3.2. Does ZATCA publish its Tax Ruling? ZATCA may publish the Tax Rulings at its discretion, but it does not publish the taxpayer information in the Tax Ruling or any taxpayer information. Tax Rulings are published anonymously. 3.3. Cases for Tax Ruling request An applicant can submit a request for a Tax Ruling in the event that he is not sure how to apply the tax laws, regulations, or regulatory tools that are relevant to his case. It could also be related to one of the transactions that he has undertaken or plans to commence, or a series of transactions, or the entire economic activity that he is carrying out or planning to carry out. Generally, the person who is planning to engage in or has engaged in a specific case or transaction should submit the request for aTax Ruling In the event that the Tax Ruling concerns the application of VAT to a certain transaction, it is usually appropriate for the supplier of the goods or services to request a Tax Ruling. In other cases, the recipient of the supplies can request a Tax Ruling (for example, when applying VAT under the reverse charge mechanism for a transaction with a non-resident supplier or when it is not possible for the supplier to submit the request). In the event that the Tax Ruling relates to the application of the income tax law to a transaction, it is typically appropriate for for the person subject to tax ( the taxpayer), or who inquires weather or not he is or will be subject to the law to request a Tax Ruling. In the event that the Tax Ruling relates to the application of the real estate transaction tax, it is typically appropriate for the person who transacts the real estate or who inquires about weather or not he is or will be considered a person who does a real estate transaction to submit a Tax Ruling request. A request for a Tax Ruling regarding the application of the Excise Tax is typically appropriate from the registered person or a person who questions whether he will be deemed to be registered. The Tax Ruling is not designed to be used in circumstance where the parties are in dispute on the application of a tax treatment on a specific transaction. Recipients of goods or services cannot request a Tax Ruling to coerce ZATCA into legally directing suppliers to apply the tax on their supplies. Suppliers may not request a Tax Ruling to force the customer to pay the tax, as this is considered a commercial dispute between the parties to the transaction, and ZATCA shall not consider the parties’ requests. Before submitting a Tax Ruling request, you must review the information and guidelines provided by ZATCA to see if the question or matter subject to the Tax Ruling is answered in the sources and information published by ZATCA. 3.4. Cases in which Tax Ruling request are prohibited It is prohibited to submit a Tax Ruling request in the cases indicated below, as ZATCA will automatically reject the request: If the Tax Ruling request is related to a restricted issue, that ZATCA will not review or consider, including: 1. Matters involving disputed tax amounts. 2. Matters involving interpretations of a foreign law. 3. Matters involving the interpretations of non-tax laws, regulations, regulatory tools, rules, controls, or policies. If the request for a Tax Ruling is not related to the applicant’s activity or activities he intends to conduct. This includes Tax Ruling request that are based on hypothetical transactions or activities. If the objective of the Tax Ruling request is different from the objective of explanatory opinion requested by the applicant. For example, the tax advisor requesting ZATCA’s opinion on a specific issue before presenting it to the taxpayers as a private tax advice. If the applicant is subject to inspection, or audit by ZATCA or has filed an objection or appeal that is currently being considered on matters related to the same type of tax that is the subject of the Tax Ruling request. If the matter is subject to a legal dispute between the applicant and another person or persons, or any matter that would lead ZATCA to take a decision against another person or persons. If ZATCA had responded to a Tax Ruling request on the same or similar issue submitted by the same applicant. 3.5. Persons eligible to submit Tax Ruling request Any natural or legal person, whether or not they are registered with ZATCA, may request a Tax Ruling as long as they meet the criteria of requesting Tax Rulings outlined by the Authority.