Saudi Arabia: Tax treatment of software payments
Guidelines to provide clarity on various agreements involving software and databases
The Zakat, Tax and Customs Authority (ZATCA) issued guidelines to provide clarity on various agreements involving software and databases, such as licensing agreements, distribution agreements, subscription agreements, and service agreements. These guidelines offer detailed, non-exhaustive examples to assist in understanding the taxation of software payments, particularly in cross-border transactions.
These guidelines are issued within the framework of the Income Tax Law and its associated regulations and do not address the taxation of software payments under income tax treaties. In cases when an income tax treaty exists with a specific country, the tax treatment of software payments must be determined based on the provisions outlined in the treaty.
For more information, contact a KPMG tax professional:
Philippe Stephanny | philippestephanny@kpmg.com