Corporate Tax Alert
Be Cautious Business Owners on Drawing SALARIES AND OTHER BENEFITS

Navigating the complex corporate tax system can be a daunting task for business owners and directors in Saudi Arabia and UAE. Every year, before filing their corporate tax returns, they are faced with the challenge of adjusting their personal benefits, such as salaries and house rent, from their taxable income. Our advice to them is to always be cautious and follow the law.

In the UAE and Saudi Arabia, the rules are equally applicable. Business owners need to be careful when deciding their salaries and bonuses because of the complex corporate tax system. Individual salaries are not taxed, but business owners need to follow the tax rules when paying themselves. The tax rules also apply to the company's directors, their relatives, and companies owned by them. Business owners can reduce their taxable income by paying themselves or their family members a salary, but there are rules to prevent abuse. Director fees are not considered salaries and may be taxed in some cases. Business owners can benefit from professional advice to follow the tax rules and optimize their financial arrangements. So be careful and take professional advice to avoid any penalties and non-compliance issues from FTA and ZATCA.