Zakat and Tax
From compliance with regulations to effective tax planning, we offer tailored solutions that help you meet all your zakat and tax obligations with precision and efficiency.
Compliance is the Foundation of Sustainability...
We recognize that zakat and tax compliance is a cornerstone of business continuity. That’s why we use technology-driven zakat calculators to simplify zakat and tax complexities and turn them into opportunities that enhance your organization’s efficiency and sustainability. In a dynamic business environment with ever-evolving regulations, companies need a strategic partner to guide them on their journey toward compliance and success. We don’t just prepare tax reports and declarations; we support you through our consulting services regarding tax planning and zakat calculation. This way, you will be prepared for making strategic decisions. With our diverse expertise and specialized team, we deliver expert consulting tax services. We also help you understand all regulations related to zakat how to calculate it, and how to confidently comply with the American taxes services and regulations.
Overview of Zakat and Tax
Zakat and Income Tax: Zakat and income tax are mandatory for any commercial activity or individual aiming to generate profit in the Kingdom of Saudi Arabia. Zakat is paid to the Zakat, Tax, and Customs Authority (ZATCA) at 2.5% of the zakat base. Income tax is calculated at a minimum of 20% on net income.
Value-Added Tax (VAT): VAT is applied at a rate of 15% on all goods and services sold by entities registered in the VAT system. The consumer pays this tax as part of the product’s price, and the business submits it to ZATCA after deducting the tax paid on purchases.
Failure to Comply with Zakat and Tax Regulations may Lead to the Suspension of Services and Significant Financial Penalties
We turn Tax Complexities into Tangible Success Opportunities
What We Offer
We believe that zakat and tax compliance is not just a legal obligation but a cornerstone of business continuity and long-term success. Whether you're looking to improve compliance efficiency or need professional advice for critical decision-making, we're here to support you every step of the way.
Our professional team provides the following services
Preparing and submitting tax returns
Providing zakat and tax consultancy
Filing objections to withholding tax, VAT, zakat, and income tax assessments
Tax planning strategies
The right choices...
The Right Choices build the Foundation for Success... Make them clearer with us.
Why Choose KHCPA?
Continuous Communication
We maintain regular communication with you during and after submitting tax reports, ensuring that all aspects of your zakat and tax obligations are under control.
Specialized Team
Our consultants are certified by the Saudi Organization for Certified Public Accountants (SOCPA) and hold specialized qualifications like VAT Specialist, ensuring you receive top-level professional service.
Understanding of Regulations
Our team is highly knowledgeable in zakat and tax laws and continuously monitors updates or changes to these regulations.
Attention to Detail
We ensure accurate tax reporting in accordance with the latest regulations, guaranteeing timely submissions.
Benefits You Gain:
Legal Compliance
Maintaining compliance with all zakat and tax regulations helps avoid any potential legal issues.
Financial Planning
Improve financial planning by legally reducing and reclaiming taxes, enhancing business efficiency.
Risk Avoidance
Submitting accurate tax returns based on reliable information ensures your organization avoids potential problems with regulatory authorities.
We’re Here to Answer All Your Questions
Clear answers that support your financial business with confidence and professionalism.
What is the difference between Zakat and income tax in Saudi Arabia?
Zakat is levied on businesses owned by Saudi nationals at a rate of 2.5% of the Zakat base, and it is both a religious and regulatory obligation. Income tax applies to shares owned by non-Saudi partners or shareholders at a minimum rate of 20% of net income. Both are overseen by the Zakat, Tax and Customs Authority (ZATCA), and KHCPA provides declaration and compliance services for each.
What is the VAT rate in Saudi Arabia and who is required to apply it?
Value Added Tax in Saudi Arabia is set at 15% and applies to all goods and services provided by registered businesses. Registration is required for any organization whose taxable revenues exceed the threshold set by the regulations, and input tax paid on purchases is deducted from the amount due. KHCPA assists clients with monthly declarations and accurate tax reconciliation.
What penalties can result from non-compliance with Zakat and tax regulations?
Failing to comply with Zakat and tax regulations can lead to the suspension of government services for the business and the imposition of significant financial penalties. In cases of repeated negligence or intentional evasion, penalties may escalate to criminal liability. Regular and timely filing of declarations is the most effective way to avoid these risks, and KHCPA makes that process straightforward for its clients.
What is withholding tax and does it apply to my company?
Withholding tax is a tax deducted from payments made to non-residents in exchange for services rendered within the Kingdom, and it ranges from 5% to 20% depending on the type of service. It applies to any Saudi company that contracts with foreign suppliers or consultants and sends them payments from within the Kingdom. KHCPA handles the correct calculation of this tax and files objections when required.