Harmful Tax Practices – 2024 Peer Review Reports on the Exchange of Information on Tax Rulings

Saudi Arabia

Saudi Arabia has met all aspects of the terms of reference (OECD, 2021[1]) (ToR) for the calendar year 2024 (year in review), and no recommendations are made.

In the prior years’ peer review reports, Saudi Arabia was not assessed for the transparency framework, as it did not issue any rulings. However, as Saudi Arabia now has implemented an administrative process to issue rulings, it is reviewed.

Saudi Arabia can legally issue one type of rulings within the scope of the transparency framework

In practice, Saudi Arabia issued no rulings within the scope of the transparency framework.

As no exchanges took place, no peer input was received in respect of the exchanges of information on rulings received from Saudi Arabia.

Information gathering process (ToR I.A)

1. Saudi Arabia can legally issue the following type of rulings within the scope of the transparency framework: cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles.

Past rulings (ToR I.A.1.1, I.A.1.2, I.A.2.1, I.A.2.2)

2. For Saudi Arabia, past rulings are any tax rulings within scope that are issued either: (i) on or after 1 January 2014 but before 1 April 2016; or (ii) on or after 1 January 2010 but before 1 January 2014, provided they were still in effect as at 1 January 2014.

3. Saudi Arabia confirms that no past rulings have been issued, as its administrative framework for issuing rulings only took effect in the year of review. Therefore, no recommendations are made regarding past rulings.

Future rulings (ToR I.A.1.1, I.A.1.2, I.A.2.1)

4. For Saudi Arabia, future rulings are any tax rulings within scope that are issued on or after 1 April 2016.

5. The Advance Pricing Agreement (APA) Committee within the Zakat, Tax and Customs Authority (ZATCA) is responsible for issuing unilateral APAs and identifies these type of rulings as in scope of the Action 5 transparency framework. Each ruling is tracked and this is double-checked by the Secretary of the APA Committee. When a taxpayer applies for a ruling, it is required to provide all relevant information regarding the related parties that are involved in the transaction, as well as the immediate and ultimate parent companies (including names, addresses and tax identification numbers). This allows the APA Committee to identify all APAs in scope and it allows the International Taxation and Exchange of Information Department (which is responsible for the exchanges) to identify the exchange jurisdictions.

6. To date, there are no unilateral APAs issued. However, an established process has been drafted regarding the identification and exchanges of rulings. This process, in line with other work carried out within ZATCA, is subject to review by the Internal Audit Department to ensure adherence.

Review and supervision (ToR I.A.3)

8. Saudi Arabia’s review and supervision mechanism is described in the previous paragraph.

Conclusion on section A

7. Saudi Arabia has met all of the ToR for the information gathering process and no recommendations are made.

Exchange of information (ToR II.B)

Legal basis for spontaneous exchange of information (ToR II.B.1, II.B.2)

8. Saudi Arabia has the necessary domestic legal basis to exchange information spontaneously.

9. Saudi Arabia has international agreements permitting spontaneous exchange of information, including (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”) and (ii) bilateral agreements in force with 56 jurisdictions.1

Completion and exchange of templates (ToR II.B.3, II.B.4, II.B.5, II.B.6, II.B.7)

10. Following the issuance of a unilateral APA, the Secretary of the APA Committee transmits the agreement and supporting documentation to the International Taxation and Exchange of Information Department. Upon receipt, tan Information Exchange Specialist reviews the information received, identifies the relevant exchange jurisdictions, and completes exchange template in line with Annex C of the BEPS Action 5 Report (OECD, 2015[3]) and the FHTP’s guidance for completing the template. After completion, the Director of the International Taxation and Exchange of Information Department, acting as the Competent Authority, reviews and approves the template.

11. After approval from the Director, the International Taxation and Exchange of Information Department, the template is sent electronically to the partner jurisdictions, in line with the timeliness required by the Action 5 transparency framework. In cases where a supplementary request for a copy of the APA is received, the Information Exchange Specialists verifies that the request meets the applicable requirements and coordinates with the legal department to provide the requested information within 90 days.

12. During the year in review, no exchanges were required to take place and no data on the timeliness of exchanges is reported.

Conclusion on section B

13. Saudi Arabia has the necessary legal basis for spontaneous exchange of information, a process for completing the templates in a timely way and has completed all exchanges. Saudi Arabia has met all of the ToR for the exchange of information process and no recommendations are made.

Statistics (ToR IV.D)

14. As no rulings were issued, no statistics can be reported.

Matters related to intellectual property regimes (ToR I.A.1.3)

15. Saudi Arabia does not offer an intellectual property regime for which transparency requirements under the Action 5 Report (OECD, 2015[3]) were imposed.

Summary of recommendations on implementation of the transparency framework

Aspect of implementation of the transparency framework that should be improved	Recommendation for improvement
	No recommendations are made.

Note

← 1.  Participating jurisdictions to the Convention are available here: www.oecd.org/tax/exchange-of-tax-information/convention-on-mutual-administrative-assistance-in-tax-matters.htm. Saudi Arabia also has bilateral agreements with Albania, Algeria, Austria, Azerbaijan, Bangladesh, Belarus, Bulgaria, China (People’s Republic of), Cyprus, Czechia, Egypt, Ethiopia, France, Gabon, Georgia, Greece, Hong Kong (China), Hungary, India, Ireland, Italy, Japan, Jordan, Kazakhstan, Korea, Kosovo, Kyrgyzstan, Latvia, Luxembourg, Malaysia, Malta, Mexico, Morocco, Netherlands, North Macedonia, Pakistan, Poland, Portugal, Romania, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Syria, Tajikistan, Tunisia, Türkiye, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, Uzbekistan, Venezuela and Viet Nam.