Software Sales Tax in Saudi Arabia 🇸🇦

Registering for sales tax in Saudi Arabia is quite a complex process. 

While it isn’t mandatory for you to use a local tax agent, the tax authority does require that you share responsibility for the recordkeeping with someone locally.  If you decide to opt- out from the appointment of the local tax representative, you will more likely be asked to pay a security deposit upfront, in case you fail to meet your tax obligations in the Kingdom of Saudi Arabia (KSA) at a later date.

You also need to navigate through the online portal where not everything that you need to know and understand will be in English!

The VAT rate in Saudi Arabia increased by 300% in 2020 (from 5% to 15%). 

The filing restrictions have recently been simplified slightly, meaning it’s easier to file and remit your taxes online.

The tax authorities in Saudi Arabia don’t look kindly on those found to be non-compliant and as such, the penalties can be crippling for businesses. 

For mistakes, such as late filing, late payment or miscalculation of the tax owed you could incur fines of between 5-25% of the tax due. All the other fines are fixed in Saudi riyal (SAR) and could easily reach SAR 50,000 (~$13,000). Where a company is thought to have committed tax evasion, you could be charged up to 300% of the tax owed, to SAR 100,000 (~$26,000).