The Saudi General Authority of Zakat and Tax (GAZT) has eliminated the requirement for non-resident companies to choose a local fiscal representative for VAT filing purposes. The decision was rescinded a year after the introduction of the value added tax. However, the appointment of such an agent remains an option for those choosing to do so.
Below, our company formation agents explain when and why foreign companies could use a fiscal representative in Saudi Arabia. They will also advise on the requirements non-resident companies need to comply with in terms of taxation.
Availability of fiscal representatives in Saudi Arabia
Even if non-resident companies are no longer required to appoint tax agents for complying with the VAT regulations, they need to use the services of a local accredited Saudi accountant. Consider the fiscal representative must also be an accountant or accounting firm, confusion may appear. The main difference between the two services is that the local accountant will be in charge of record-keeping tasks.
If you need fiscal representation services in Saudi Arabia, our accountants are at your disposal.
Requirements for companies not appointing a Saudi fiscal representative
Until a few years back, the GAZT had required that non-resident companies choose a local VAT agent for the purposes of filing, registration, and VAT payments. This decision was made to ease the communication between the two parties. However, now, foreign taxpayers who do not have Saudi fiscal representation will need to designate a local accountant going ahead in order to maintain records.
In the absence of a fiscal representative, foreign taxpayers will additionally need to provide GAZT with a cash deposit or bank guarantee. The assessment will be based on the VAT liabilities for approximately 6 months. On the other hand, those choosing to operate through a fiscal representative in Saudi Arabia will not be subject to any deposit or guarantee.
If you want to register a company in Saudi Arabia and need advice, you can rely on our local consultants.
Services provided by a fiscal agent in Saudi Arabia
Fiscal representative services in Saudi Arabia are available for both resident and non-resident companies. They are usually provided in order to ease VAT and tax compliance in this country.
Here are the main services available with such an agent:
- support in obtaining a VAT number in Saudi Arabia without establishing a permanent presence, such as a branch office;
- ensure VAT compliance and tax declaration processing;
- assistance in adhering to other local tax regulations;
- acting as a liaison office with the Saudi tax authorities.
In most cases, the fiscal representative is employed for VAT compliance, however, local companies also use such services for other tax-related matters.
We remind you that our company registration advisors in Saudi Arabia also have accountants on their team, so we are ready to provide multiple services.
Who can act as a fiscal representative in Saudi Arabia?
Accountants and accounting firms registered with the Saudi Organization for Chartered and Professional Accountants(SOCPA) will be admitted as fiscal representatives without the need for additional qualifications.
For other companies, the tax representative needs to:
- have a contract with a taxable person;
- have a Saudi residence permit or Iqama;
- be in business for at least 5 five years.
VAT compliance requirements in Saudi Arabia
Here are the main aspects to consider about the value added tax in Saudi Arabia:
- VAT registration is required for all Saudi companies selling goods or services in a minimum amount of SAR 375,000 in a calendar year;
- starting with January 1st 2023, companies must issue e-invoices;
- failing to file VAT returns within the due date will attract a fine of 5% of the unpaid amount of money.
We also have a team of lawyers who can assist in other matters, such as immigration to Saudi Arabia. Feel free to contact us if you need fiscal representation in Saudi Arabia.