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If a non-profit charitable organization is established under regulations and laws of a foreign country, contracted with a resident local entity to carry out non-profit operations within Saudi Arabia, is such organization subject to taxes in Saudi Arabia?

As long as the organization is not licensed by competent authorities in Saudi Arabia as a charitable organization according to its laws and regulations, then it is not deemed a charity organization in Saudi Arabia. Accordingly, unless the income obtained by this organization is exempted from taxes in Saudi Arabia, then it will be subject to taxes as per its laws and regulations and will be defined as a non-resident permanent establishment and will be obligated to register in GAZT. Also, it will be required to file tax returns and pay due duties as per the statutory dates. Such organizations will be expected to retain its books and records within Saudi Arabia, and commit to declaring any expenses paid to non-resident entities and will be subject to withholding tax as stipulated in Article 68 of the Income Tax Law.
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Last Update: 04 Sep 2020 06:15 PM Saudi Arabia Time