Under the Income Tax Law, issued by a Royal Decree on March 6, 2004, income tax in the Kingdom of Saudi Arabia is levied by the Zakat, Tax, and Customs Authority. Every natural and legal person is subject to this tax, including resident financial companies with shares owned directly or indirectly by non-Saudi individuals, shares owned directly or indirectly by individuals working in oil and hydrocarbon production, non-Saudi resident natural persons conducting activities in the Kingdom, non-resident individuals carrying out activities in the Kingdom through a permanent establishment, non-resident individuals with taxable income sources in the Kingdom without having a permanent establishment, individuals engaged in natural gas investment, and individuals engaged in oil and hydrocarbon production.
The law defines a resident natural person in the Kingdom based on the tax year as someone who meets either of the following conditions: First, they have a permanent residence in the Kingdom and reside in it for a total of at least thirty days in the tax year in the Kingdom. Second, they are a resident in the Kingdom for not less than 183 days in the tax year.
Additionally, a company is considered a resident in the Kingdom during the tax year if it is established as a legal entity according to the Companies Law, and its principal management is located in the Kingdom.
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