The tax year in Saudi Arabia is the State’s financial/fiscal year (1 January to 31 December). Alternative tax years are allowed in the following situations:
- The taxpayer uses an approved tax year before the entry into force of the current income tax law;
- The taxpayer uses a tax year based on the Gregorian calendar; or
- The taxpayer is a member or permanent establishment or group of companies using a different tax year.
Annual tax returns must be filed within 120 days following the close of the previous tax year.
Companies in Saudi Arabia are required to make 3 advance tax payments by the last day of the 6th, 9th, and 12th month of the current year. The amount of each payment is equal to 25% of the previous year's tax liability, less tax withheld.
The final payment is due with the tax return.
The Saudi Zakat, Tax, and Customs Authority (‘ZATCA’) has introduced a voluntary tax amnesty program applicable from 18 March 2020 until 30 June 2021 (earlier applicable until 31 December 2020). The amnesty scheme applies to corporate income tax (including withholding tax), VAT, and excise tax. The amnesty program includes the suspension of all fines or penalties for disclosures made during the amnesty period, including in relation to late returns or amended returns, late payments, etc., for registered as well as non-registered taxpayers. The penalty relief is also being provided for voluntary disclosure in relation to artificial structures used to benefit from Zakat taxation instead of corporate income tax. No relief is provided in relation to penalties for tax evasion.
The penalty relief is provided according to the following tax payment schedule:
- 100%, where the tax due is paid between January and March 2021 as well as for tax debts resulting from assessment or reassessment, which is paid in full until 21 January 2021;
- 75%, where the tax due is paid between April and May 2021; and
- 50%, where the tax due is paid in June 2021.