Embarking on the journey to cease your tax residency in Saudi Arabia can be a pivotal step for many individuals. Whether you are relocating for personal or professional reasons, understanding the necessary procedures will ensure a smooth transition. Below is a comprehensive guide that delineates each step required to successfully terminate your tax residency in the Kingdom of Saudi Arabia.
Step 1: Determine Eligibility
Before initiating the process, ensure that you meet the criteria for ceasing tax residency. This generally includes having no permanent home or center of vital interests in Saudi Arabia, and spending less than 183 days in the country during a tax year.
Step 2: Gather Required Documentation
Collect all necessary documents, including your passport, visa, proof of residence, and any other evidence that supports your claim of non-residency. This may also include documents showing your new residence in another country.
Step 3: Notify Relevant Authorities
Inform the Saudi tax authorities of your intention to cease tax residency. This typically involves submitting a formal notification or application to the General Authority of Zakat and Tax (GAZT) or the Zakat, Tax and Customs Authority (ZATCA). Ensure that all required forms are accurately completed and submitted.
Step 4: Settle Outstanding Tax Liabilities
Ensure that you have settled all outstanding tax liabilities in Saudi Arabia. This includes paying any due taxes, fines, or penalties. Obtain a clearance certificate from the tax authorities confirming that there are no pending dues.
Step 5: Close Local Bank Accounts
If you hold any bank accounts in Saudi Arabia, proceed to close them or change their status to non-resident accounts. This is crucial to avoid any future tax implications related to income generated within the country.
Step 6: Deregister from Local Services
Deregister from any local services, such as utilities, telecommunications, and municipal services. This helps to ensure that you are no longer considered a resident for any local administrative purposes.
Step 7: Retain Proof of Non-Residency Status
Keep copies of all submitted forms, notifications, and correspondence with the tax authorities as proof of your non-residency status. This documentation will be essential if you need to verify your tax status in the future.
Legal References
- Income Tax Law issued by Royal Decree No. M/1 dated 15/1/1425H (corresponding to 6 March 2004)
- Ministerial Resolution No. 1535 dated 11/6/1425H (corresponding to 28 July 2004)
- Zakat, Tax and Customs Authority (ZATCA) guidelines
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