Saudi Arabia operates a unique dual-tax framework where Zakat and Corporate Income Tax (CIT) are administered by the Zakat, Tax and Customs Authority (ZATCA). Saudi and GCC-owned entities are generally subject to Zakat, while foreign shareholdings are taxed under the Corporate Income Tax regime. Mixed-ownership businesses must allocate both accurately, making Tax and Zakat Returns in Saudi Arabia highly specialized areas of compliance.

As ZATCA increasingly integrates e-invoicing and financial data with annual declarations, businesses are expected to maintain accurate records and prepare and submit their Zakat and Corporate Income Tax Returns within the applicable statutory deadlines. Errors in ownership allocation, tax computation, classification, or supporting documentation can result in penalties, reassessments, and operational disruptions.

Why Tax & Zakat Returns Demand Specialist Handling

The zakatable base is not determined solely by profitability. Instead, it is calculated using the applicable ZATCA methodology, considering elements such as share capital, retained earnings, reserves, and qualifying liabilities while applying relevant adjustments and deductions. Incorrect treatment of these elements can affect the Zakat liability reported in the return and expose businesses to regulatory scrutiny.

Similarly, companies subject to Corporate Income Tax in Saudi Arabia must accurately determine taxable income by applying the relevant tax rules and adjustments to accounting profit. Businesses may also need to consider withholding tax, transfer pricing, related-party transactions, and other applicable tax requirements when preparing their annual returns.

Since Zakat and Corporate Income Tax returns are generally due within 120 days after the financial year-end, businesses should establish robust compliance processes to ensure their returns are accurate, properly supported, and submitted within the applicable deadline.

Our Tax & Zakat Return Services Cover

Zakat Return Services

• Preparation and submission of Zakat returns for businesses across various sectors.
• Zakat base computation under the applicable ZATCA methodology.
• Ownership analysis for Saudi, GCC, and mixed-ownership structures.
• Review of financial statements and supporting schedules.
• Assessment of relevant additions, deductions, assets, liabilities, reserves, and equity components.
• Preparation of annual Zakat declarations.
• Assistance with ZATCA requirements and information requests.
• Support for obtaining and maintaining a Zakat certificate.

Corporate Income Tax Return Services

• Preparation and submission of KSA Corporate Income Tax returns.
• Computation of Corporate Income Tax obligations in Saudi Arabia.
• Review of accounting-to-tax adjustments and deductible expenses.
• Assessment of tax obligations for foreign-owned companies and applicable permanent establishments.
• Preparation and submission of Withholding Tax returns, where applicable.
• Transfer Pricing Disclosure Form and auditor affidavit support.
• Country-by-Country Reporting (CbCR) assistance for qualifying multinational groups.
• Support with ZATCA tax queries, assessments, and related correspondence.

2026 Tax & Zakat Return Compliance Notes

Key Considerations for Businesses

• 120-day deadline: Businesses should generally submit their Zakat and Corporate Income Tax returns within 120 days after the end of the relevant financial year.
• Accurate financial information: ZATCA’s increasing use of e-invoicing and financial data makes consistency between accounting records and tax and Zakat returns increasingly important.
• Ownership classification: Mixed-ownership businesses must accurately determine the portion subject to Zakat and the portion subject to Corporate Income Tax.
• Tax adjustments: Accounting profit may require specific adjustments when determining taxable income for Corporate Income Tax purposes.
• Transfer pricing: Businesses with qualifying related-party transactions should assess applicable transfer pricing disclosure and documentation requirements.
• Supporting documentation: Proper working papers and evidence should be maintained to substantiate amounts reported in tax and Zakat returns.
• Regulatory developments: Businesses should continue monitoring changes to Saudi Arabia’s tax, Zakat, and procedural requirements.

How Insights Can Help You

• Accurate Tax & Zakat Returns: Our specialists review financial information, ownership structures, tax adjustments, and Zakat calculations to support accurate preparation of annual returns.
• Ownership-Based Tax Allocation: For mixed-ownership structures, we accurately distinguish Zakat and Corporate Income Tax obligations, reducing the risk of incorrect reporting or unnecessary liabilities.
• Zakat Base Assessment: We assess relevant balance sheet components and adjustments to help businesses determine an accurate Zakat base under the applicable ZATCA methodology.
• Corporate Tax Computation: We review accounting records and applicable tax adjustments to determine the Corporate Income Tax liability to be reported in the annual return.
• International Tax Support: Where applicable, we help businesses address withholding tax, tax treaty considerations, dividends, royalties, and other cross-border tax matters.
• Transfer Pricing Integration: We incorporate relevant transfer pricing considerations into the annual return process and support associated disclosure and documentation requirements.
• ZATCA Support: From information requests to assessments and reviews, our professionals help businesses prepare supporting documentation and respond to ZATCA requirements.
• Audit-Ready Compliance: We maintain structured calculations, working papers, and supporting schedules to strengthen the documentation behind your Tax and Zakat Returns.

Speak to our specialists before the applicable Tax and Zakat Return deadline approaches. Ensure your returns are accurately prepared, properly supported, and submitted on time.