The information requested through the disclosure form provides insight into the areas that ZATCA is likely to focus on when assessing an RHQ’s compliance with ESR requirements. We’ve identified the following key considerations for RHQs:
1. Governance and strategic decision making: The disclosure concerning board members, executive management, board meetings and RHQ employees indicates an increased focus on governance arrangements and evidencing that the RHQ possesses adequate human capital resources in Saudi Arabia to perform its licensed activities. RHQs should ensure board minutes and supporting documentation adequately demonstrate that strategic decisions are being made and controlled in Saudi Arabia.
2. Licensed versus non-licensed activities: Attention should be paid to activities falling outside the RHQ’s approved licensing scope. The RHQ tax incentives generally apply only to qualifying licensed activities. Consequently, income generated from activities that do not qualify under the approved RHQ license may remain subject to normal Saudi tax rules. This information is expected to allow ZATCA to reconcile financial information against tax filings and evaluate whether any income should fall outside the RHQ incentive regime.
3. Headquarters and branch locations: The disclosure appears intended to capture information regarding the RHQ entity and its registered branches within Saudi Arabia. However, the guideline does not expressly address whether any information relating to the wider multinational group structure should be included. Further clarification from ZATCA might be required.
4. Consistency in filings: Information in the form should be consistent with the RHQ license, financial statements, tax returns, transfer pricing documentation and other information available to ZATCA.
5. Supporting documentation: The guideline requires supporting documents for financial disclosure to be submitted but doesn’t provide an exhaustive list for that purpose. RHQs should maintain a comprehensive ESR support file covering corporate and governance records, board minutes, management and employee records, premises and asset documentation, financial information, revenue analysis and evidence of activities performed in Saudi Arabia.
6. Due date for filing: ZATCA hasn’t formally specified a statutory deadline for filing the disclosure form. However, it appears that the form is intended to be submitted before filing the RHQ’s annual income tax or zakat return. For periods prior to financial year 2026, it is recommended that the relevant records and information also be maintained and made available in case they are requested by ZATCA. RHQs should nevertheless continue to monitor future official guidance from ZATCA and seek clarification where appropriate regarding the applicable filing timetable.
