KSA's Zakat, Tax, and Customs authorities (ZATCA) released a Guide for the Special Integrated Logistics Zone (SILZ)

An iconic announcement of the 30-year tax exemption package for foreign companies establishing their regional headquarters in the kingdom has made, ZATCA has released the General Guide to Zakat, Tax, and Customs Regulations for the Special Integrated Logistics Zone (SILZ).

SILZ, introduced in November 2022, stands as a distinctive logistics free zone, benefitting from unparalleled global and regional connectivity owing to its close proximity to the airport and seamless access to rail, metro, and ring road systems. Notably, SIZL presents compelling direct and indirect tax advantages tailored for both Saudi and foreign investors, including:

· Waiver of customs duties on goods imported or transported within SIZL

· Exemption from VAT on goods entering SIZL for specific activities

· A 0% income tax rate on specified activities within SIZL (excluding Zakat)

The SIZL Tax Guide provides an all-encompassing resource, spanning from fundamental definitions to intricate regulations encompassing corporate tax, value-added tax, and customs, alongside dedicated chapters outlining procedural and administrative facets such as audit procedures, compliance protocols, and penalties within SIZL. The SIZL guide highlights the importance of observing the applicable transfer pricing and SAAR (Specific Anti Abuse Rules) requirements.

Within SIZL, entities must adhere strictly to Saudi Transfer Pricing regulations, ensuring alignment with the arm's length principle. The SIZL Guide underscores the significance of complying with SAAR requirements, particularly concerning the transfer of activities from mainland entities into SIZL, emphasizing the necessity for such transfers to be conducted at arm's length. Additionally, the guide delves into various specific anti-abuse rules for further clarity.