1. Taxable persons
According to the income tax law, the following persons are subject to income tax:
- A resident capital company to the extent of its non-Saudi shareholding.
- A resident non-Saudi natural person who carries on activities in Saudi Arabia.
- A non-resident person who carries out activities in Saudi Arabia through a permanent establishment (PE).
- A non-resident person who has other income subject to tax from sources within Saudi Arabia.
- A person engaged in natural gas investment fields.
- A person engaged in oil and other hydrocarbon production.
- A resident capital company with respect to shares owned either directly or indirectly by persons operating in oil and hydrocarbon production.
A corporation is resident in the KSA if it is registered in accordance with the regulations for companies in the KSA (i.e. it has a commercial registration number) or if it is headquartered in the Kingdom.
A PE of a non-resident in the KSA, unless otherwise provided below, consists of the permanent place of activity of the non-resident through which one carries out business, in full or in part, including business carried out through an agent. The following are considered a PE:
- Construction sites, assembly facilities, and the exercise of related supervisory activities.
- Installations or sites used for surveying for natural resources, drilling equipment, or ships used for surveying for natural resources, and the exercise of related supervisory activities.
- A fixed location where a non-resident natural person carries out business.
- A branch of a non-resident company that is licensed to carry out business in the KSA.
- A non-resident partner in a resident personal company is considered an owner of a PE in the KSA in the form of a share in a personal company.
KSA also operates a concept of a services PE, and even a so-called virtual services PE, which means that even work carried out remotely may be considered as part of PE. Additionally, KSA operates a concept of partial force of attraction in regard to the income to be attributed to the PE.