WHT is typically a direct tax that Saudi residents withhold by deduction from certain payments made to non-residents of Saudi Arabia under the tax law. The applicable rate is specified in Article 68(a) of the Saudi Arabia Income Tax Law.
The tax is withheld by the resident payor (e.g., customers) from the amounts payable to Zoom and is remitted by the customers to the Zakat, Tax and Customs Authority (ZATCA). Based on Article 68(b)(1) of the Saudi Arabia Income Tax Law, Saudi-based customers are required to remit WHT to ZATCA within 10 days following the end of the month in which the payment was made to Zoom.
WHT is due no later than the tenth (10th)day following the month in which the payment was made to a non-resident.
Pursuant to clause 13.4 of Zoom's Terms of Service, you are required to make payments to Zoom free of any deductions, including a deduction for withholding tax. However, if the applicable law requires tax to be withheld from the payment, then you will pay such additional amount as necessary, such that the net amount received by Zoom is equal to the amount that would have been due and payable by Zoom under the Terms of Service.
The applicable WHT rate is 15% for license fees or 5% for technical support services. If the applicable rate is 15%, the WHT should be calculated as 15% of the amount payable to Zoom divided by 85%. For example, if the amount payable to Zoom for license fees is 100, then the WHT would be 15% of (100/85%). This translates to 15% of 117.647. The WHT would therefore be 17.647. In case the amount payable to Zoom relates to technical support services is 100, then the WHT would be 5% of (100/95%). This translates to 5% of 105.263. The WHT would therefore be 5.263.
Using the above license fee (15%) example, you are then required to remit 17.647 as WHT to ZATCA. Pursuant to Section 68(b)(2) of the Saudi Arabia Income Tax Law, customers making payments to foreign vendors are also required to timely provide a WHT certificate to foreign vendors such as Zoom until the end of the month following the payment.
In case you are a business customer, you may be required to disclose to ZATCA agreements you have entered into where the payment to a foreign vendor, including Zoom, exceeds SAR 100,000 (approx. USD 27,000). This should be done within 3 months from the contract start date. Generally, in order to take a tax deduction when you file your tax return, you are required to remit withholding tax to ZATCA.
Once the WHT payment is made, customers can share the WHT certificates by submitting these to the following email address: firstname.lastname@example.org.