Saudi Arabia, as a member of the OECD/G20 Inclusive Framework on BEPS, has adopted the requirements under Action 13, including Country-by-Country Reporting (CbCR). The Kingdom introduced its domestic CbCR rules in 2018 and has developed a clear framework for multinational groups to ensure compliance with international tax transparency standards.

This guide outlines the key regulatory obligations, thresholds, timelines, penalties, and practical guidance for MNEs operating in or through Saudi Arabia.

Legal and Regulatory Framework

• Implementing Authority:
  Zakat, Tax and Customs Authority (ZATCA – formerly GAZT)
• Primary Legislation:
  • Transfer Pricing Bylaws issued in February 2019
  • Article 18: Specific provisions relating to Country-by-Country Reporting
• International Participation:
  • Member of the OECD Inclusive Framework
  • Signatory to the OECD’s Multilateral Competent Authority Agreement (MCAA)
  • Participates in the automatic exchange of CbC reports

Who is Required to File?

Ultimate Parent Entity (UPE) in Saudi Arabia

• Required to file a CbC Report if the MNE group has consolidated annual revenues of SAR 3.2 billion or more (approx. EUR 750 million) in the preceding fiscal year.

Constituent Entities in Saudi Arabia

• Required to file a notification confirming:
  • Whether they are the reporting entity; and
  • If not, the identity and tax residence of the reporting entity.
• A secondary filing obligation may apply in certain scenarios where:
  • The UPE’s jurisdiction does not require CbC reporting;
  • There is no qualifying exchange agreement in place; or
  • A systemic failure of exchange exists.

CbCR Notification Requirements

• Deadline: On or before the last day of the reporting fiscal year
• Method: Submitted via ZATCA’s TP Disclosure Form as part of the annual tax return

CbC Report Filing Requirements

• Deadline: Within 12 months after the end of the reporting fiscal year
• Format: OECD-compliant XML schema
• Submission Platform: ZATCA’s dedicated CbCR online portal

CbC Report Contents

• Revenues (unrelated and related party)
• Profit or loss before income tax
• Income tax paid and accrued
• Stated capital
• Retained earnings
• Number of employees
• Tangible assets (excluding cash and equivalents)
• List of all constituent entities and their main business activities

Penalties for Non-Compliance

• Failure to submit the CbC Report:
  Penalty of up to SAR 500,000
• Failure to submit notification or incorrect information:
  Penalty of up to SAR 100,000
• ZATCA may also initiate further audits or impose sanctions based on the severity and duration of non-compliance.

Additional Considerations

• Master File and Local File Requirements:
  Entities part of an MNE group with total controlled transactions exceeding SAR 6 million per year must also prepare and maintain Master and Local Files.
• Language: Documentation must be available in Arabic, though ZATCA may accept English versions under certain conditions.
• Exchange of Information:
  Saudi Arabia exchanges CbC reports automatically with other jurisdictions under the MCAA network.

Useful Resources

• ZATCA (Zakat, Tax and Customs Authority):
  https://zatca.gov.sa
• OECD CbCR Portal:
  https://www.oecd.org/tax/beps/country-by-country-reporting.htm