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May 15, 2026
Guideline for Regional Headquarters in KSA
Guideline to Clarify the Tax and Zakat Provisions
Applicable to the Activities of Regional Headquarters
Contents
1. Introduction
2. Overview of the Regional Headquarters Program
2.1. Overview
2.2. Regional Headquarters Qualification Standards
2.2.1. Mandatory Activities of the Regional Headquarters
2.2.2. Optional Activities of the Regional Headquarters
2.3. Tax Incentives Available to Regional Headquarters
2.4. Registration Mechanism
3. Economic Substance Requirements (ESR)
3.1. Economic Substance Requirements (ESR)
3.2. Procedures for Submitting a Declaration that Economic Substance Requirements have been Met
4. Taxes and Tax Incentives Applied in KSA to the Activities of Regional Headquarters
4.1. Income Tax
4.2. Withholding Tax
4.3. Value Added Tax (VAT)
4.4. Zakat
4.5. Transfer Pricing
4.6. Real Estate Transaction Tax (RETT)
5. International Tax Aspects and Application of DTAA
6. Tax Procedures applied to Regional Headquarters
6.1. Registration
6.2. Tax/Zakat Base, Submission of Returns and Payment of Tax/Zakat
6.2.1. Income Tax
6.2.2. Withholding Tax
6.2.3. Value Added Tax (VAT)
6.2.4. Zakat
6.2.5. Transfer Pricing
6.3. Record Keeping and Maintaining Requirements
6.4. Examination, Assessment, and Objection Procedures
6.5. Tax Avoidance
6.6. Penalties Imposed for Non-Compliance with Economic Substance Requirements
6.7. Penalties Imposed for Non-Compliance with Tax Regulations
Table 1 - Type of Violation: Failure to Submit the Required Tax Return or Disclosure
Table 2 - Type of Violation: Failure to Pay Tax
Table 3 - Type of Violation: Other Violations of the Tax Law and International Agreements
Table 4 - Type of Violation: Tax Evasion and Penalties
Annexure: Guidelines and Publications Relevant to Regional Headquarters
The Zakat, Tax and Customs Authority (“ZATCA, Authority”) has issued this Guideline for the purpose of clarifying certain tax treatments concerning the implementation of the statutory provisions in force as of the Guideline’s issue date. The content of this Guideline shall not be considered as an amendment to any of the provisions of the Laws and Regulations applicable in the Kingdom.
Furthermore, the Authority would like to highlight that the clarifications and indicative tax treatments prescribed in this Guideline, where applicable, shall be implemented by the Authority in light of the relevant statutory texts. Where any clarification, interpretation or content provided in this Guideline is modified -in relation to unchanged statutory text- the updated indicative tax treatment shall then be applicable prospectively, in respect of transactions made after the publication date of the updated version of the Guideline on the Authority’s website.