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Family businesses form the backbone of Saudi Arabia’s private economy, with Jeddah home to some of the Kingdom’s most established and diversified family enterprises. These companies are increasingly seeking external investment to fund growth, diversify portfolios, or prepare for public listings. In this environment, the role of a credible audit extends well beyond regulatory compliance. It becomes a key enabler of investor trust, demonstrating transparency, stability, and governance maturity.

As Saudi Arabia continues to embark on its journey of economic transformation as part of Kingdom’s Vision 2030, regulatory reform is critical to achieving a diversified, transparent, and digitally enabled economy. One of the most significant drivers of this transformation is the Zakat, Tax and Customs Authority (ZATCA), which has launched various reform initiatives aimed at enhancing transparency, increasing compliance, reducing the financial burden on taxpayers and modernising businesses by leveraging on technology and digital solutions. For companies establishing themselves, or already operating in the Kingdom, conformity to the ever-evolving framework established by ZATCA is prudent, if not necessary, for sustainable growth.

Although known for some time now, however, a refresher could be imperative as the Kingdom of Saudi Arabia further advances its Vision 2030 transformation. Multinational enterprises operating in the country must carefully navigate a dual fiscal framework that includes both religious and statutory obligations.

As the Kingdom of Saudi Arabia continues its ambitious economic transformation under Vision 2030, corporate tax has become a central focus for finance leaders operating in the region. The shifting regulatory landscape, increasing enforcement activity, and heightened transparency expectations mean that Chief Financial Officers must remain fully informed and proactive in managing their tax responsibilities. This article outlines the key areas every CFO should understand to navigate the current tax environment in KSA effectively and strategically.

As international trade accelerates and foreign direct investment continues to shape Saudi Arabia’s economic landscape, cross-border transactions are becoming a core element of business operations. Whether involving the payment of royalties, interest, technical service fees, or dividends to foreign entities, one area that consistently demands attention is withholding tax. For businesses operating in or transacting with Saudi-based entities, understanding and managing withholding tax is essential for maintaining compliance, managing costs, and safeguarding transaction efficiency.

As the Kingdom of Saudi Arabia continues to transform its economy, regulatory expectations on corporate transparency and financial discipline have increased significantly. Within this evolving landscape, statutory audits are not merely a legal formality. They play a pivotal role in reinforcing trust, improving governance, and ensuring the integrity of financial reporting. Despite their growing importance, many organisations continue to treat audit as a reactive exercise. This often resulted in last minutes preparation, operational inefficiencies, and increased risk exposure, undermining the very objectives audits are meant to achieve. ,

Saudi Arabia is experiencing a significant economic transformation under Vision 2030, opening new avenues for entrepreneurs, scale-ups, and rapidly expanding businesses across multiple sectors. As these high-growth companies gain market traction, scale operations, and attract international capital, tax strategy becomes more than a compliance function; it becomes a critical enabler of sustainable value creation and risk management.

In today’s dynamic economic environment, the role of audit is undergoing a significant transformation. Once viewed primarily as a statutory requirement focused on compliance and historical accuracy, audit is now increasingly recognised as a tool for generating strategic insight. This shift is particularly relevant in Saudi Arabia, where the ambitions of Vision 2030 are driving wide-ranging reforms in corporate governance, economic diversification, and foreign investment.

The Kingdom of Saudi Arabia is undergoing a substantial transformation in its economic and regulatory frameworks, guided by Vision 2030 and a national focus on attracting foreign investment, enhancing corporate transparency, and aligning with global tax practices. Central to this transformation is the advancement of transfer pricing regulation, a key area for multinational enterprises and local businesses engaged in related-party transactions. In the current environment, managing transfer pricing effectively is both a regulatory obligation and a strategic lever for value creation and risk mitigation.

The construction sector in Saudi Arabia continues to play a central role in advancing the Kingdom’s Vision 2030 goals. With a robust pipeline of giga-projects and infrastructure expansion, the need to manage tax obligations with precision has never been more critical. While the Value Added Tax (VAT) regime applies broadly across industries, the construction sector has distinct features that require careful attention to avoid compliance risks and cash flow challenges.

Background

The International Monetary Fund’s (IMF) April 2025 World Economic Outlook (WEO) has provided updated inflationary assessments impacting financial reporting under IFRS. Based on this latest guidance, certain countries continue to be classified as hyperinflationary as at 30 June 2025, which triggers the application of IAS 29: Financial Reporting in Hyperinflationary Economies.

Saudi Arabia’s business landscape is evolving rapidly, driven by Vision 2030, digital transformation, and shifting global markets. Traditional growth models are no longer sufficient in an era of economic diversification, technological advancements, and changing consumer expectations. To stay competitive, business leaders must embrace innovation, align with national priorities, enhance agility, and integrate sustainability into their strategies. By adapting to these emerging trends, companies can unlock new opportunities and drive long-term success in the Kingdom’s dynamic economic future.

Saudi Arabia is rapidly emerging as a powerhouse in the global startup ecosystem, fostering innovation and entrepreneurship to build the next generation of billion-dollar companies. With a strategic vision, robust economic reforms, and increasing investment in technology and infrastructure, the Kingdom is positioning itself as a leading hub for startups aspiring to scale into unicorns.

ZATCA on 21 March 2025, announced the 22nd wave of taxpayers for implementing integration (phase 2) of e-invoicing, which now includes taxpayers whose taxable revenues exceeded SAR 1.00 Million during the years 2022, 2023 or 2024.

As Saudi Arabia continues its economic transformation under Vision 2030, the tax landscape is evolving rapidly. The Kingdom has recently implemented significant tax reforms including incentives and Regional Programs to diversify its revenue sources and create a business-friendly environment. In 2025, businesses operating in Saudi Arabia must stay informed about the key tax regulations to ensure compliance, manage liabilities effectively, and seize potential opportunities. This article explores the critical tax considerations businesses need to navigate this year's Saudi market.