A practical, keyword-rich guide for corporate taxpayers in Saudi Arabia on Country-by-Country (CbC) Reporting: learn the SAR 3.2 billion threshold, notification and filing timelines, the inclusion of Zakat payers from 2024, documentation, penalties, and a step-by-step compliance checklist aligned with ZATCA requirements.
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Who Must Do CbC Reporting in Saudi Arabia?
- Threshold: Multinational enterprise (MNE) groups with consolidated revenue > SAR 3.2 billion in the immediately preceding fiscal year.
- Constituent entities in KSA: KSA entities of such MNE groups are subject to CbC notification rules; the CbC report is filed by the Ultimate Parent Entity (UPE) in its jurisdiction, or a Surrogate Parent Entity when applicable.
- Zakat payers included (from 1 Jan 2024): Transfer pricing provisions now extend to Zakat payers; CbC-related obligations can apply where conditions are met.
Core Timelines & Deadlines (KSA Focus)
Saudi compliance typically involves two distinct notifications plus the CbC report itself:
- Cbc Notification – DFCT/TP Disclosure (KSA return): Provide UPE/surrogate details in the Disclosure Form of Controlled Transactions (DFCT) that accompanies the income tax/Zakat return. (Market practice aligns this with within 120 days after the fiscal year-end.)
- Cbc Notification – AEOI Portal: Many groups also submit a separate notification on the AEOI portal on or before the last day of the reporting fiscal year (jurisdiction-specific; confirm annually in ZATCA guidance).
- CbC Report filing (XML): Due within 12 months after the end of the MNE group’s reporting fiscal year. If the UPE is outside KSA, local entities should ensure the report will be exchanged with KSA (no systemic failure) or consider surrogate filing.
| Item | Who | Where | Typical Due Date |
|---|---|---|---|
| CbC Notification (DFCT) | KSA constituent entity | Within KSA tax/Zakat return (DFCT) | ~120 days after year-end |
| CbC Notification (AEOI) | KSA constituent entity | AEOI/CbCR portal | On/before last day of reporting FY |
| CbC Report (XML) | UPE or Surrogate | UPE’s jurisdiction / KSA if surrogate | Within 12 months after FY-end |
Zakat Payers: What Changed & What It Means
- Scope extended: From 2024, TP provisions (including documentation, disclosures, and potential CbC touchpoints) now apply to Zakat payers as well as income taxpayers.
- Documentation parity: Zakat payers with material related-party dealings should maintain Master File and Local File and complete the DFCT where thresholds are met.
- Governance uplift: Expect increased scrutiny around arm’s length pricing and intercompany charge support.
Data You Need for CbC Compliance (KSA-Relevant)
- Consolidated revenue test: Verify prior-year group revenue > SAR 3.2B.
- Constituent listing: Up-to-date legal entity list (jurisdiction, TIN, activities).
- Table 1 metrics: Revenue (related/unrelated), profit/loss before tax, income tax paid/accrued, stated capital, accumulated earnings, employees, tangible assets.
- Table 2 activities: Nature of business activities by jurisdiction (e.g., manufacturing, sales, services, IP holding).
- Table 3 narrative: Additional explanations and methodology notes.
Penalties, Risks & Practical Tips
- Late/incorrect notification or filing: Can trigger penalties and follow-up audits.
- Systemic failure risk: If KSA cannot obtain the group CbC Report via exchange, local filing or surrogate strategies may be required.
- Data consistency checks: Align CbC data with Master/Local Files, statutory accounts, and DFCT to avoid red flags.
- Zakat payers: Even where no income tax is due, documentation failures can still attract penalties; treat TP governance as mandatory.
Saudi CbC Compliance Checklist (Quarterly)
| Control | Owner | Status |
|---|---|---|
| Confirm SAR 3.2B threshold vs latest consolidation | Group Controllership | □ |
| Update KSA DFCT/notification data (UPE/surrogate) | KSA Tax | □ |
| AEOI portal notification readiness (if applicable) | KSA Tax | □ |
| Master/Local File refresh (material RPTs) | TP Team | □ |
| Data reconciliation with statutory accounts | Finance | □ |
Example Timeline (FY Ended 31 Dec 2025)
- By 31 Dec 2025: AEOI portal CbC notification (where applicable).
- By 29 Apr 2026 (~120 days): DFCT/TP disclosure with KSA return includes UPE/surrogate details.
- By 31 Dec 2026: CbC report filed (XML) by UPE/surrogate; ensure exchange covers KSA.
FAQs for Saudi Corporate Taxpayers
Does the SAR 3.2B threshold use prior-year revenue?
Yes, based on the consolidated financial statements for the fiscal year prior to the reporting year.
We’re a Zakat payer only. Do TP/CbC rules affect us?
From 2024, TP provisions extend to Zakat payers. Where thresholds trigger, maintain TP files, complete the DFCT, and ensure CbC notifications/reporting are addressed.
What if the UPE’s jurisdiction doesn’t exchange with KSA?
Consider a surrogate filing in a jurisdiction that exchanges with KSA or explore local filing fallback if prescribed.
Is the CbC report format standard?
Yes, OECD-compliant XML schema with Tables 1–3 and jurisdictional breakdowns.
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Action Plan for CFOs & Heads of Tax
- Confirm threshold: Test SAR 3.2B revenue for the prior year and identify UPE/surrogate.
- Set dual reminders: AEOI notification (FY-end) and DFCT/return disclosure (~+120 days).
- Govern data quality: Reconcile CbC numbers to group consolidation; lock methodologies.
- Extend to Zakat entities: Apply TP governance consistently across income tax and Zakat populations.
- Pre-audit binder: Keep TR master file, local file(s), DFCT, intercompany agreements, and CbC workpapers ready.
Robust CbC processes reduce audit risk, prevent exchange-related surprises, and keep Saudi corporate taxpayers fully aligned with ZATCA expectations for 2025 and beyond.
