The Zakat, Tax, and Customs Authority (ZATCA) has published proposed amendments to the Income Tax Law for public consultation on the platform, Istitlaa, on 25 September 2023. The due date to submit comments and feedback on the proposed amendments is 25 October 2023.
In summary, the proposed amendments suggest the following Income Tax Law provisions:
- Payments made to a natural person by an employer under an employment arrangement are not subject to withholding tax (WHT).
- Bonuses paid to board members or those in similar positions are considered wages.
- Payments made to non-resident entities classified as “transparent entities” are not subject to WHT to the extent of the share attributed to a resident of Saudi Arabia.
- Refers the tax treatment of research and development expenses to the Income Tax Implementing Regulations.
- New WHT rates and categories.