Saudi Arabia — CIT & Zakat Annual Return (ZATCA Portal)

Establish the legal entity type, Commercial Registration (CR) details, fiscal year-end, and exact shareholder nationality breakdown (Saudi/GCC vs non-Saudi/GCC). This step determines whether the entity is subject to CIT only, Zakat only, or a mixed CIT-Zakat split. Sector classification (standard, natural gas, oil/hydrocarbons, banking/insurance) is also confirmed here because the applicable CIT rate (20%, 30%, or 50–85%) flows from it.

Collect and review the audited (or draft) financial statements for the fiscal year, together with supporting schedules required for the CIT and Zakat computations. This phase identifies any gaps — missing depreciation schedules, unreconciled related-party balances, or untracked loss carry-forwards — before computation begins.

Compute Saudi adjusted taxable income per Articles 5–17 ITL, applying the interest deduction limitation (Article 12: deductible interest capped at 50% of EBITDA with excess carried forward), the declining-balance depreciation schedule (Article 17), and the loss carry-forward offset (Article 21: indefinite carry-forward but capped at 25% of current-year taxable income). For a mixed entity, the resulting taxable income is then apportioned between the foreign-share (CIT 20%) and the Saudi/GCC-share (Zakat — handed off to the Zakat base computation).

For entities with a Saudi/GCC-owned share, compute the Zakatable base under the Implementing Regulations (Ministerial Resolution No. 2082 of 1438H) using the higher-of rule: Net Adjusted Profit vs Working Capital Base (paid-up capital + retained earnings + reserves + long-term liabilities minus net book value of long-term assets and investments in Zakat-paying subsidiaries). Apply the Gregorian-equivalent rate of 2.5772% (if the taxpayer files on a Gregorian fiscal year) to the Saudi/GCC-ownership proportion of the Zakatable base.

Review all related-party transactions (RPTs) for arm's-length compliance under the 2019 ZATCA Transfer Pricing Bylaws (aligned to OECD BEPS Action 13). Prepare the mandatory TP Disclosure Form to be filed with the annual return. Determine whether the group's consolidated revenue exceeds SAR 3.2 billion (CbCR threshold per the TP Guidelines) or SAR 750 million (Master File / Local File threshold) and flag documentation obligations accordingly.

Reconcile the three advance CIT instalments paid during the year (each approximately 25% of the prior-year liability under Article 60 ITL, due at the end of the 6th, 9th, and 12th months of the fiscal year) against the current-year CIT liability. Calculate WHT credit offsets. Determine the balance payable (or refund claimed) with the annual return. Flag any late or short instalment exposure for the 5%-per-month default surcharge (capped at 25% of underpaid amount).

Compile the integrated annual Zakat / Income Tax return via the ZATCA portal (zatca.gov.sa), attach all required schedules (audited financials, TP Disclosure Form, loss carry-forward schedule, interest carry-forward schedule, WHT credit schedule), submit electronically, and retain the ZATCA acknowledgement. Confirm the 120-day deadline from fiscal year-end (e.g., 30 April 2026 for FYE 31 December 2025). Record-keeping requirements are 10 years from fiscal year-end.