ZATCA’s tax requests ruling guideline

The Zakat, Tax, and Customs Authority (ZATCA) has recently updated its guidelines regarding tax ruling requests, which is primarily designed to assist taxpayers in understanding the process to obtain clarity on KSA’s tax laws in relation to the taxpayer’s specific circumstances.

According to ZATCA, the specific Tax Ruling will serve as ZATCA’s clarification as to the application of any tax laws and regulations in relation to the applicant’s specific factual issue.

In order to obtain a clarification, the taxpayer will make an official request to ZATCA. Where required, ZATCA may also provide a 5-day period to the applicant to provide additional information as may be requested by ZATCA.

Overview of the tax ruling request procedure

• ZATCA will initially review the request to determine its appropriateness and can reject any request at its discretion.
• ZATCA will then evaluate the request based on completeness, relevance, and compliance with the guidelines.
• ZATCA will issue the ruling, which will serve as a binding and reliable ruling or interpretation to ensure the taxpayers’ compliance.
• The content of a ruling may be affected by changes in the applicant’s status, tax laws, or their interpretation.
• Importantly, tax rulings are not subject to objection as they are meant to provide clarity on tax law application. According to ZATCA, the tax ruling does not lead to any legal effect in itself, and thus is not subject to objection. However, where the applicant is of the view that the ruling is based on a misconception of facts or law, the applicant may submit a reconsideration request on the tax ruling.

Important considerations for applicants

• Applicants must review ZATCA’s guidelines and conditions before submitting a request.
• The Tax Ruling request must be submitted in the prescribed format and include all necessary information and documents.
• Tax Rulings focus on specific factual issues and are not meant for hypothetical scenarios or legal disputes between parties.
• Applicants are responsible for providing accurate and complete information.

Conclusion

ZATCA’s updated guidelines are a significant step towards ensuring transparency and clarity in the application of tax laws. Taxpayers are encouraged to utilize these guidelines to better understand their tax obligations and to seek ZATCA’s opinion when necessary.
 
Authored by: Zain Satardien, Aakriti Sharma