ZATCA (Zakat Tax and Customs Authority) issues tax certificates in the Kingdom of Saudi Arabia to verify whether a business is compliant with tax laws, enable the legal collection of Value Added Tax (VAT), and confirm the business's tax residency status for international treaty benefits. These Tax Certificates increase the transparency in the system, reduce and prevent tax evasion, and make running financial operations easier for companies registered in Saudi Arabia.
The meaning of Tax Certificates in the Kingdom of Saudi Arabia
ZATCA issues an electronic document in Saudi Arabia, known as the Tax Residency Certificate, to both individuals and companies to verify tax residency and avoid double taxation. Obtaining a Tax Residency Certificate in Saudi Arabia is free and can be obtained via the ZATCA portal. Getting a Tax Residency Certificate typically requires proof of residence in the Kingdom of Saudi Arabia for more than 183 days for individuals. For companies, ZATCA requires proof of the management team located in the Kingdom of Saudi Arabia.
Types of Tax Certificates in the Kingdom of Saudi Arabia
The different types of Tax Certificates in the Kingdom of Saudi Arabia include:
- Zakat and Tax Certificate (Registration, Restricted and Final)
- VAT Certificate
- Tax Residency Certificate (TRC)
- Withholding Tax Certificate
- Real Estate Transaction Tax Certificate (RETT)
Zakat and Tax Certificate
- Registration Certificate: This is a certificate granted to businesses in their first year of operations in the Kingdom of Saudi Arabia.
- Restricted Certificate: This is a certificate issued to companies that have not yet completed all their tax filing or payment obligations. This tax certificate allows businesses to conduct most government transactions, but it does not allow them to receive “full and final” financial settlements from government entities.
- Final Certificate: The final Zakat certificate in Saudi Arabia is issued by the ZATCA portal after the final return is filed and all outstanding liabilities are paid. The Final Zakat Certificate is a confirmation of the business's compliance for a specific time period and allows businesses to merge, close, or renew licenses, which are issued immediately upon payment on the online portal.
VAT Certificate
A VAT certificate in the Kingdom of Saudi Arabia acts as authoritative evidence that a particular business can collect and remit VAT in adherence with ZATCA regulations. The VAT Certificate has all the important details of the business, such as the business name and registration number. All businesses need to obtain a Saudi VAT certificate to show compliance as and when they meet ZATCA’s registration threshold.
Tax Residency Certificate (TRC)
The Tax Residency Certificate (TRC) is an official document issued by ZATCA that declares whether an individual or an entity is a tax resident of the Kingdom of Saudi Arabia. The Tax Residency Certificate allows residents to benefit from Double Taxation Avoidance Agreements (DTAAs), which help them avoid paying taxes twice on the same income. The Tax Residency Certificate application is free and can be obtained from the ZATCA portal.
Withholding Tax Certificate (WHT)
A Withholding Tax Certificate in Saudi Arabia is an official document issued by ZATCA that confirms whether a resident entity has deducted and remitted tax on payments to non-residents, typically ranging from 5% to 20%. This certificate serves as proof of tax payment for foreign vendors and is requested through the ZATCA portal on submission of monthly returns.
Real Estate Transaction Tax Certificate (RETT)
This certificate confirms whether the 5% tax on the disposal of real estate has been paid.
Application process for Tax Certificates in the Kingdom of Saudi Arabia
We have outlined below the application processes for the various tax certificates described above. Each tax certificate has a unique application process, detailed below.
Application process for Zakat and Tax Certificates
Businesses must register with the ZATCA portal in order to obtain the Zakat and Tax Certificates in Saudi Arabia. You are required to submit your commercial registration details, and must obtain a TIN (Tax Identification Number), as well as ensure no outstanding, late or unpaid liabilities or returns. You can apply for the certificate via the “Zakat” or “Tax” tab on the portal.
Steps to apply for Zakat and Tax Certificates in Saudi Arabia
1: Log in to the ZATCA portal (https://zatca.gov.sa/)
2: Go to the Zakat tab and select “Request for Certificate”
3: Select “New Request” and complete the form.
4: Requirements: The company must have no overdue payments or outstanding Zakat declarations
5: Upon approval by the authorities, the certificate is issued electronically
Application process for VAT Certificate in Saudi Arabia
The application process for a VAT Certificate requires you to register on the state or national tax portal, submit business details such as the PAN, bank details, address proof, and turnover, and pay the required fees. Once all the documents have been verified by the authorities and the premises inspection has been completed, ZATCA issues a permanent VAT identification number (TIN) and certificate.
Steps to apply for a VAT Certificate
- Check eligibility: Determine whether your business's turnover exceeds the mandatory registration threshold.
- Prepare all the documentation: Gather documents such as the Incorporation Certificate, the Partnership deed, address proof (rental agreement, utility bills), the PAN card, the Bank account details and photographs of proprietors/directors
- Online registration: Visit the official state commercial tax portal or national VAT portal
- Submit application: Fill out the VAT Registration form (eg. VAT100), and upload all the required documents
- Verification and inspection: Typically, authorities will visit your business premises 3 days after you submit all your information to verify the details.
- Payment and issuance: Pay the required fees, and the VAT Certificate will be issued within 1 day of verification.
Application process for Tax Residency Certificate in Saudi Arabia
Individuals and entities must submit their applications through the ZATCA e-portal, under the “Zakat, tax and customs services” section, to obtain a Tax Residency Certificate in the Kingdom of Saudi Arabia. Documents that are required for this include a valid passport/Iqama, proof of residence, and an employment letter to confirm residency status under the Saudi Income Tax Law.
Steps to apply for a Saudi Tax Residency Certificate:
- Visit the ZATCA website and log in, or open the mobile app.
- Select the Service menu option, select “Zakat, tax and customs services”. Now choose “Request for Certificate”, then choose “Tax Residency Certificate”.
- Fill in and complete all required information, such as personal details, TIN, and period of residency.
- Upload all required documents, such as a passport/Iqama, proof of address, and an employment verification letter.
- Click the submit button to send the request and download the certificate once it is approved by the authorities through the portal.
Application process for Withholding Tax Certificate (WHT) in Saudi Arabia
To obtain a Withholding Tax (WHT) Certificate in KSA, you need to register on the ZATCA e-portal with your credentials, select “Zakat, tax and customs services”, select “Request for Certificate” and fill in the required details. A key requirement is to file your monthly WHT returns within 10 days of the following month before requesting the certificate.
Steps to apply for a Saudi Withholding Tax Certificate (WHT)
- Log in to the ZATCA Portal with your credentials
- Go to “Service”, then click on “Zakat, tax and customs services”. Now, click on “Request for Certificate”.
- Initiate a new request by selecting “New Request”. This creates a new WHT Certificate application.
- Fill in all the details, such as tax year, tax period, and the supplying company name (non-resident vendor).
- Submit the application to receive a notification and the certificate. Applications are typically processed within 5 minutes for WHT returns, and the certificate serves as proof of taxes withheld on payments to non-resident entities.
Application process for Real Estate Transaction Tax Certificate in Saudi Arabia
To get a Real Estate Transaction Tax Certificate (RETT), you have to register your real estate transaction on the ZATCA portal before the notary transfer. Once you get the RETT Payment Certificate, you will have to submit it to your Notary Public to complete and finalise the transfer.
Steps to apply for a Real Estate Transaction Tax Certificate
- Log in to the ZATCA portal (https://zatca.gov.sa/)
- Select the “Real Estate Transaction Tax” service and select the type of transaction/conveyancer
- Enter details: Input property information (location, type, title deed number), seller/buyer details, and transaction value
- Submit a copy of the contract, title deed or transfer agreement
- Review, confirm the data, and generate a SADAD bill
- The RETT Payment Certificate is issued once 5% of the tax is paid through SADAD
In the Kingdom of Saudi Arabia, ZATCA makes it easy for business owners to navigate what may otherwise seem like a complex registration framework to obtain different types of tax certificates. Just follow the steps outlined above to receive the Tax Certificate of your choice on the ZATCA portal. To make obtaining a Tax Certificate easy when applying through the portal, keep all required documents handy and ready to upload. ZATCA is very efficient in processing Tax Certificates, and you can be assured of a seamless experience while using the portal.
