Saudi Arabia: Finance Minister Approves Executive Regulations for Zakat Collection

Agraam, 15 February 2025: The Saudi Finance Ministry has approved the latest executive regulations for Zakat collection, aimed at streamlining the process across various business sectors.

The comprehensive 128-article regulations provide detailed guidance on Zakat procedures, addressing challenges faced by those required to pay.

These regulations includes all aspects of Zakat collection, including rules established through independent ministerial decisions.

They cover the calculation of Zakat for taxpayers, financing activities, and investors in investment funds.

Additionally, exemptions are outlined for properties owned by endowments, charitable organisations, and training units.

Significant updates include the introduction of a minimum Zakat base and a cap to protect taxpayers from escalating costs.

These regulations will apply to fiscal years beginning 1 January 2024, with declarations due in 2025, following the specified conditions and guidelines.

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Saudi Arabia: Health Ministry Enforces Compliance with Health Regulations

Ajel, 12 February 2025: The Health Ministry has emphasised the necessity of full compliance with the approved regulations and laws regarding the practice of health professions, private health institutions, and pharmaceutical establishments and products.

The ministry has added that the Health Professions Practice System stipulates that a health practitioner must not engage in diagnostic and treatment methods that are not scientifically recognised or prohibited in the Kingdom.

It is also prohibited, except in cases specified by the executive regulations, for the practitioner to advertise themselves or promote themselves directly or through intermediaries.

The Private Health Institutions System also stipulates the prohibition of advertising health institutions except in accordance with the executive regulations and professional ethics, and it prevents the health practitioner from advertising themselves or using unapproved titles.

The Pharmaceutical Establishments and Products System states the prohibition of trading pharmaceutical and herbal products before registering them with the General Authority for Food and Drug, and that pharmaceutical product advertisements must comply with the regulations specified in the executive regulations.

Anyone who sells, dispenses, or possesses unregistered pharmaceutical products with the intent to trade is considered in violation of this system.

The Health Ministry has stated that penalties in these cases include: a financial fine of up to 10 million riyals, imprisonment for up to ten years, closure of the establishment, and revocation of the licence (for the establishment and the practitioner).

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Saudi Arabia: Government Entities Exempted From Fines on Violations

Agraam, 8 February 2025: A royal decree has been issued in Saudi Arabia, exempting government entities from penalties and fines associated with violations of municipal licensing regulations.

These entities are required to address and rectify the violations within one year from the date of the decree.

The decree also authorises the Municipalities and Housing Minister to extend the exemption period for an additional year.

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Saudi Arabia: Waives Tax Fines

Arabian Business, 4 February 2025: Saudi Arabia has announced it will waive a range of fines and penalties on tax violations as it looks to support businesses registered in its tax system.

The Zakat, Tax and Customs Authority (ZATCA) has urged taxpayers to seize the opportunity presented by the cancellation of fines and exemption of penalties initiative, which is available until 30 June 2025.

This initiative offers a reprieve from fines associated with late registration, payment, and filing of returns under all tax laws.

Additionally, it includes waivers for penalties related to correcting VAT returns, violations of VAT field control, and non-compliance with e-invoicing and other VAT regulations.

To benefit from this initiative, taxpayers must be registered with the tax system, submit any previously unfiled returns to ZATCA, and settle all outstanding principal tax debts related to those returns.

An option to apply for an instalment plan is also available, provided the application is made while the initiative is active and all payments are made on time as per the approved schedule.

However, the initiative does not extend to penalties related to tax evasion or fines that were settled before the initiative commenced.

ZATCA encourages taxpayers to familiarise themselves with the initiative’s details through the simplified guidelines on its website.

These guidelines offer a thorough explanation of the types of penalties covered, the conditions for exemption, the process for managing instalment payments, and information on field control violations.

For further inquiries, taxpayers can contact ZATCA via phone: 19993, X: @Zatca_Care, Email: info@zatca.gov.sa and Online: zatca.gov.sa.

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Saudi Arabia: Allows Foreigners to Invest in Listed Companies

The Saudi Capital Market Authority (CMA) has announced a significant policy change allowing foreign investors to invest in listed Saudi companies that own real estate in the holy cities of Makkah and Madinah.

Effective from 27 January 2025, this move is designed to boost investment, enhance the capital market’s appeal, and strengthen its competitiveness on both regional and international levels, while supporting the local economy.

The CMA’s decision follows the approval of regulations that exclude certain companies from the definition of “Non-Saudi” under the Law of Real Estate Ownership and Investment by Non-Saudis.

Foreign investments will be limited to shares and convertible debt instruments of these companies, with a cap of 49% ownership for non-Saudis.

Strategic foreign investors are exempt from owning shares or convertible debt instruments.

This initiative allows non-Saudi investors to tap into the economic benefits of projects in Makkah and Madinah without breaching existing laws.

Additionally, Saudi-listed companies can acquire property rights for their headquarters or branches in these cities, provided they comply with specific regulations.

The CMA has been actively working to make the Saudi capital market more attractive to foreign investors, aligning with the goals of Saudi Vision 2030.

This includes previous measures like allowing foreign residents to invest directly in the stock market and enabling foreign strategic investors to acquire stakes in listed companies.

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Saudi Arabia: Issues Updated Guidelines For Recreational Facilities

Gulf Insider, 20 January 2025: The Ministry of Municipalities and Housing has clarified that the updated guidelines apply to all recreational facilities except venues such as theatres and cinemas.

The Ministry of Municipalities and Housing has released updated guidelines for recreational facilities as part of its ongoing efforts to enhance service quality, encourage investment in the recreational sector, and ensure visitor safety while protecting the rights of all stakeholders.

The ministry has clarified that the updated guidelines apply to all recreational facilities except venues such as theatres and cinemas.

The revisions aim to improve the business environment, stimulate investments, and ensure compliance with the Saudi Building Code in construction processes.

The new guidelines include various requirements related to spatial aspects such as location, area, complementary activities, and signage.

They also address architectural requirements, façade aesthetics, and other technical and operational standards to enhance the user experience and deliver integrated recreational services that meet community expectations while adhering to the highest safety and quality standards.

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Saudi Arabia: New Executive Regulations For Law Practice Come Into Force

Gulf Insider, 20 January 2025: The Saudi Bar Association (SBA) has announced the enforcement of the new executive regulations for law practice, effective from 15 January 2025.

These regulations replace the previous ones issued in 1423 AH.

The updated regulations aimed to enhance the organisational framework of the legal profession, aligning it with modern international best practices.

They also seek to strengthen the Kingdom’s competitiveness and improve its business environment by ensuring the availability of essential legal services for investors and business owners across various sectors.

The new regulations include significant updates and reforms, such as the repeal of the rules on disciplinary action and the filing and adjudication of related complaints issued in 1443 AH.

Additionally, the executive regulations for licensing foreign law firms, issued in 1444 AH, and the rules for mitigating conflicts of interest for former judiciary employees and their equivalents practicing law, issued in 1444 AH, will be annulled.

Key provisions of the new regulations address the qualifications and experience required to practice law, requirements related to the integrity of the Lawyers Registration and Admission Committee, cases where lawyers are transferred to the register of non-practicing lawyers, rules for law office operations, and procedures for lawyers seeking to suspend their practice.

The SBA has emphasised its commitment to leveraging its status and authority to positively influence the regulation of the legal profession and consulting services.

The association aims to elevate professional practice standards, ensure the ethical and efficient performance of legal practitioners, and increase awareness of professional responsibilities.

These efforts are intended to empower the legal profession and foster its economic growth.

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Saudi Arabia: Announces New Benefits for Importers and Exporters

Gulf Insider, 12 January 2025: Saudi Arabia has introduced a series of incentives aimed at enhancing trade within the Kingdom, focusing on import and export businesses.

The Zakat, Tax and Customs Authority (ZATCA) has partnered with 14 government entities to fortify the Saudi Authorised Economic Operator Program.

This collaboration is set to offer new benefits and incentives to importers and exporters, fostering improved cooperation between government bodies and the commercial sector.

The initiative is designed to enhance the security of the global supply chain while providing significant advantages to participating businesses.

ZATCA, in conjunction with its government partners, offers a variety of administrative, procedural, and financial benefits tailored for importers and exporters.

Additionally, a specific category of benefits is available for logistics service providers, such as customs brokers and freight forwarders.

The revamped Saudi Authorised Economic Operator Program is pivotal in advancing the Kingdom’s logistics sector by streamlining trade processes and enhancing competitiveness through inter-agency collaboration.

This effort aims to facilitate trade, improve supply chain efficiency, and expedite procedures, ensuring seamless and flexible trade operations.

It also seeks to enhance access to global markets, complying with the highest international standards and best practices.

This initiative aligns with international trade security and facilitation standards set by the World Customs Organisation, with mutual recognition agreements playing a key role in fostering international cooperation and trade benefits.

Interested parties can find more information about the program’s advantages and conditions on ZATCA’s website.

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Saudi Arabia: Amends Traffic Law to Penalise Driving With Expired Vehicle Registration

Saudi Arabia has introduced significant amendments to its Traffic Law, making driving with an expired vehicle registration (istimara) a traffic violation.

The amendment involves the cancellation of Article 71 of Saudi Arabia Cabinet Decision No. 315/1428, which previously imposed a fine of SR100 for each year or part thereof for delayed renewal of driving licenses and vehicle registrations, with a maximum fine of SR300.

The fine was applicable after 60 days from the expiry date.

Additionally, a new paragraph has been added to the Traffic Violations Schedule, explicitly stating that driving with an expired vehicle registration is a violation.

In the same session, the Cabinet approved the Petroleum and Petrochemical Products Law and tasked King Abdullah University of Science and Technology with overseeing the Saudi Centre for Vaccines and Protein Treatments.

Minister of Media has highlighted the Cabinet’s review of recent government activities aimed at enhancing international cooperation and addressing global challenges.

The Cabinet has also addressed the situation in the occupied Palestinian territories, condemning Israeli actions and advocating for a ceasefire in Gaza.

Domestically, the Cabinet has assessed progress in development programs focused on economic diversification and resource optimisation.

Several international agreements were approved, including MoUs with Uruguay in sports, North Macedonia in Islamic affairs, Singapore in justice, and Morocco in health.

Agreements were also made with Qatar in digital government, Eswatini in air services, and Peru in financial intelligence.

The Cabinet endorsed final accounts for various Saudi authorities and funds for previous fiscal years.

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