Saudi Arabia: Initiative to Evaluate E-stores with Artificial Intelligence Launched

Saudi Gazette, 17 March 2024: Saudi Arabia’s Commerce Ministry has announced it has launched an initiative to evaluate e-stores with artificial intelligence.

The initiative was launched to mark World Consumer Rights Day and is aimed at helping merchants understand store evaluations.

It is also aimed at offering them opportunities to improve their scores by adhering to 11 standards.

These standards include displaying the commercial registry number, necessary licences and tax number on the homepage. They also include registering the store’s link in the registry and the Saudi Business Centre platform and providing policies for protecting consumer data and privacy.

In addition, they include policies for replacements, returns and refunds as well as dealing with customer complaints and suggestions.

They include polices on consumer rights and duties for shipping and delivery too.

The standards require e-stores to offer easy means of communication for customer service as well.

They also require e-stores to ensure the website is secure and of high quality. This will take the site speed, ease of use, and HTTPS link with cybersecurity protection into account.

Finally, they include verifying all fines imposed on the e-store have been paid.

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Saudi Arabia: SDAIA Consults on Regulation on Personal Data Transfer

Saudi Arabia: Supply of Services Regulations Come into Force

Saudi Gazette, 12 March 2024: The Regulation to Suspend Government Services has come into force.

The Saudi Arabian authorities said that the Regulations came into force on 11 March.

They specify that services can only be suspended after a grace period for rectifying the violation has been given.

Services related to treatment, education, jobs, commercial registration or documentation cannot be suspended in a way that would hurt a beneficiary or their dependents.

As well as allowing a grace period, services should only be suspended in line with a legal document.

The suspension of services should be carried out in three phases.

There should be 15 days in the first and second phases. This can be extended for another 15 days.

The period in the third phase will be determined in line with the specifications in the statutory document for the suspension.

This will be submitted by the government authority, requesting the suspension.

Where the reason for suspending services is rectified, the suspension will have to be lifted within 24 hours by the relevant government entity.

Individuals and institutions can submit a request to extend the grace period before services are suspended.

They can also request details of the entity suspending the services.

This is aimed at protecting the rights of the parties involved as well as improve compliance and commitment.

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Saudi Arabia: Insurance Authority Now Responsible for Health Insurance

Saudi Gazette, 4 March 2024: Saudi Arabia’s Insurance Authority has announced it is now responsible for health insurance in the Kingdom. It assumed responsibility today.

The powers were transferred to it from the Council of Health Insurance.

The Authority’s CEO said the transfer of powers won’t affect current insurance policies or claims because the current laws and regulations will continue to be implemented.

Policyholders and health insurance beneficiaries will also be able to continue to exercise all their rights under the current laws and regulations and there won’t be any change in the current terms and conditions of insurance policies.

In terms of complaints and claims, all complaints and enquiries related to health insurance will be transferred to the Insurance Authority from today.

The Authority will follow up on old complaints and claims and new complaints will be filed through the Authority’s via the appropriate channels.

These are the complaints hotline, which can be reached on 800124055, via care.ia.gov.sa or via the customer protection account @ia_care_gov on X.

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Saudi Arabia: New Railway Law Approved

Arab News, 28 February 2024: Saudi Arabia’s Cabinet has approved new railway regulations.

They have been approved to support the goals of the National Transport and Logistics Strategy being achieved.

They have also been approved to help the governance of the railway sector and regulate the relationship between infrastructure owners, operators and beneficiaries.

They will ensure railway service providers continue to apply the highest standards and requirements for safety and quality.

They will also develop policies and legislation to ensure fair competitiveness.

They will encourage the use of railways, ensure the protection of railways and their infrastructure and facilities in line with internationally approved standards.

They also specify penalties to protect railway tracks and prevent damage to the network.

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Saudi Arabia: Sources of Funding for Infrastructure Projects Defined

Alsaber, 21 February 2024: Saudi Arabia’s Cabinet has approved a Law that defines the permitted sources of funding for the National Infrastructure Fund.

Under the National Infrastructure Fund Law, its resources consist of the support provided to it by the state for its activities and cash flows from the loans disbursed from its capital.

It also consists of the revenues from its assets and investments, the funds subject to law enforcement carried out to collect its dues, the financial compensation it receives for the services and work it provides and the donations, grants, proceeds from endowments as well as any other resources accepted by the Cabinet.

The Fund has been established to support, finance and develop infrastructure projects together with the public or private sector in line with the relevant policies and strategies adopted.

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Saudi Arabia: Financial Security Offerings Rules Amended

Al Riyadh, 18 February 2024: The board of Saudi Arabia’s Capital Market Authority has approved amendments to the Financial Security Offerings Rules.

They have also approved instructions for offering real estate shareholding certificates and the list of terms used in the regulations and rules of the Authority.

They will come into force on their published date.

They have been adopted in line with the Authority’s remit. They define the real estate contributions system, specifically in terms of organising the shareholder register for real estate contributions and organising the issuing of the real estate contribution certificate that proves the shareholder owns a share in the real estate contribution.

They have also been issued to regulate the registration and offering of real estate contribution certificates, including specifying the requirements that must be met before offering, marketing, advertising, or raising funds for these certificates as well as the requirements for private placement and public offering of these certificates and regulating the obligations of the financial market institution through which the offering will take place.

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Saudi Arabia: Terms and Conditions for Raft of Tax Incentives Issued

Saudi Gazette, 17 February 2024: The terms and conditions for benefiting from a raft of tax incentives announced in December 2023 have been issued.

The terms and conditions have been published in the Official Gazette and specify how multinational companies will be able to qualify for 30-year income tax exemptions after they have moved their regional headquarters to Saudi Arabia.

Companies will not be able to benefit from the exemption if the amount paid by the regional headquarters relates to non-approved activities or a company has committed tax avoidance. To be able to benefit, the company’ regional headquarters must have a valid licence issued by the Investment Ministry and it must not engage in activities other than those which are within the scope of the licence.

The regional headquarters must have appropriate assets too. This should include a suitable building to carry out its activities in Saudi Arabia and ensuring the activities of the regional headquarters are managed. This will include holding board of director meetings.

The regional headquarters must also meet operational expenses in Saudi Arabia needed to carry out its activities and the regional headquarters must generate revenues from approved activities in the Kingdom. It must also have at least one director residing in Saudi Arabia.

The regional headquarters must have a sufficient number of full-time employees during the tax year, commensurate with the activities of the regional headquarters too and the employees must have the knowledge and experience required to enable them to perform their tasks and responsibilities. The regional headquarters must register with the Zakat, Tax and Customs Authority in line with the procedures specified in the relevant tax and zakat regulations.

It must submit tax and zakat returns in line with the relevant tax and zakat regulations and submit an annual report using the form prepared by the Authority in line with the specified procedures. This will enable verification that the actual economic requirements have been met.

In terms of books and records, the regional headquarters must prepare and maintain accounts for each tax year throughout the duration of its licence. This includes the partial tax year that begins from the date of obtaining a regional headquarters licence and ends on the last day of the tax year for that entity.

If the regional headquarters engages in non-qualifying activities at any time during the tax year, it must maintain separate accounts for the non-qualifying activities and income must be allocated to the qualifying activities as if they were independent of the other activities of the regional headquarters.
The Zakat, Tax and Customs Authority has the right to carry out all of its regulatory and executive tasks assigned to it by law, including obtaining information and conducting evaluations, examinations and audits of the regional headquarters in Saudi Arabia in line with the provisions and procedures contained in the relevant tax and zakat regulations.

The Authority also monitors and verifies that the regional headquarters are meeting the actual annual economic growth requirements. The regional headquarters can submit a request to obtain an interpretive decision from the Authority to provide an explanation or clarification regarding tax issues related to these tax rules and regulations. If the regional headquarters does not comply with the tax and zakat regulations, the relevant penalties will be imposed on it.

The regional headquarters can also object to the assessment, re-assessment and penalties imposed by the Authority. It can appeal and submit complaints in line with the relevant tax and zakat regulations.
Where the regional headquarters does not meet any of the actual economic requirements during the validity of the licence period, the Authority will notify the regional headquarters of the violation and give it 90 days to correct it. This period starts from the date of notification and will be without prejudice to the penalties contained in the tax regulations.

If the regional headquarters fails to comply, a fine of 100,000 Riyals will be imposed and the violation will have to be remedied within 90 days of the fine being imposed.

If the violation is not remedied within 90 days of the fine being imposed or the violation is repeated within three years from the fine being imposed, a fine of 400,000 Riyals will be imposed.

If the violation still continues, the Zakat, Tax and Customs Authority and Investment Ministry can suspend the tax incentives.

The Authority can cancel the tax incentives, together with the Investment Ministry if the regional headquarters deliberately submits false or misleading information or declarations to the Authority.
They can also do so where the regional headquarters intentionally applied the rules incorrectly, or misused tax incentives to benefit from or help others benefit from tax incentives on activities that are not qualified or licensed by the Investment Ministry.

In addition, they can do so where the regional headquarters makes payments to non-resident persons on behalf of persons who are not eligible for tax incentives.

Where the tax incentives are cancelled, the Authority will issue the tax assessment and apply the relevant fines in line with the tax regulations in relation to the tax years the offences occurred. All tax avoidance and evasion provisions in the relevant tax regulations will also apply to the regional headquarters.

Regional headquarters will be considered residents of the Kingdom to the extent that they meet the residency requirements of the Income Tax Law for the purposes of all international treaties, agreements or other agreements Saudi Arabia is a party to.

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Saudi Arabia: Protection of Whistleblowers and Witnesses Law Approved

Saudi Gazette, 13 February 2024: Saudi Arabia’s Cabinet has approved the Law for the Protection of Whistleblowers, Witnesses, Experts and Victims.

The law is aimed at giving individuals who may come under threat for giving evidence in court cases protection.

It gives powers to judicial authorities to provide the necessary protection to witnesses, victims, whistleblowers, experts and members of their families from any threats. This includes assault, revenge and intimidation.

It will encourage and facilitate information sharing and provide protection to informants, witnesses, experts and victims from any attacks or threats, material or moral harm, or anything that may adversely affect the delivery of this information.

A draft version of the law to ensure whistleblowers, witnesses, experts and victims, who are at risk for providing information on crimes was approved a few years ago.

They also approved the Saudi Tourism Authority Regulation.

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