What is Corporate Tax?
Corporate tax (corporate income tax) is the tax levied on a company’s net profit. The rate, base, and incentives vary by jurisdiction and entity type.
How It Works
- Start with accounting profit.
- Adjust for permanent and temporary differences to reach taxable income.
- Apply the statutory rate; pay current tax and disclose deferred tax.
Saudi Context
Saudi corporate tax is 20% on profit attributable to non-Saudi/non-GCC shareholders, while Saudi/GCC shares are subject to 2.5% Zakat. ZATCA administers both, with returns due 120 days after year-end.
Example
A mixed Saudi company with SAR 50 million profit and 40% foreign ownership pays 20% CIT on SAR 20 million (SAR 4 million) plus Zakat on the Saudi/GCC portion.
