A Saudi-resident company withholds tax on a payment made to a non-resident during a given Gregorian month. Under the Saudi Income Tax Law and its Implementing Regulations, by when must the withheld tax generally be remitted to ZATCA?
- By the end of the same month in which the payment was made
- By the 10th day of the month following the month in which the payment was made
- By the end of the Zakat or tax year in which the payment was made, alongside the annual return
- Within 10 days of the non-resident recipient's own home-country tax filing deadline, regardless of when the Saudi payment occurred
Why B? And why not the others?
Correct answer: B. By the 10th day of the month following the month in which the payment was made
The withholding agent must pay withheld tax to ZATCA within the first ten days of the month following the month in which the payment to the non-resident was made, making this a recurring monthly obligation rather than an annual one. The option requiring remittance by the end of the same month is wrong because it does not allow for the short administrative window the rules actually give, ending on the 10th day of the following month rather than the last day of the payment month itself. The option tying remittance to the end of the Zakat or tax year is wrong because it would let withheld amounts sit unremitted for up to nearly a year, contrary to the monthly remittance cycle the law establishes. The option tying the Saudi deadline to the non-resident recipient's own home-country filing deadline is wrong because the Saudi withholding agent's remittance obligation is fixed by the date of the Saudi payment itself, not by any unrelated foreign filing date.
Source: Saudi Income Tax Law (Royal Decree No. M/1 of 1425H) and its Implementing Regulations, withholding tax remittance deadline