TaxSavvySA

Saudi partner left mid-year

Saudi partner exited mid year. How is tax split?

The situation

Tax and Zakat follow the share of non-Saudi and Saudi ownership. A mid-year change needs a time-based split.

The law

  • Income Tax Law and Zakat Regulation, mixed ownership: Non-Saudi, non-GCC share pays 20 percent income tax; Saudi and GCC share pays Zakat

What it means for you

Example: 50 percent foreign for 6 months, 100 percent for 6 months gives 75 percent average foreign share. Apply 20 percent to that share of profit. Confirm ZATCA's method.

What to do

  1. Get change date.
  2. Time-weight shares.
  3. File.

We can do this for youAnnual income tax return for foreign-owned and mixed companies: 20 percent CIT on the foreign share plus Zakat on the Saudi share: SAR 7,500

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