What is the tax advisory process?

Tax burdens often overwhelm not just the internal teams but the leaders as well. With the constant stress of fulfilling compliance, meeting deadlines, filing, and computation of tax challenges, it becomes hard to prioritize other tasks, specifically during the filing season. This not only drains energy, but many business core activities and operations are also neglected. Tax advisory comes as a huge support in these critical times, clearly in countries like Saudi Arabia with a multi-taxation system, which is even complex to grasp.

A professional tax advisor drags you away from all the tax barriers by implementing best tax practices through a complete step-by-step process that not just lets the team focus on what needs most of their attention but also allows the founders and authorities to stay calm and confident during even the straining tax seasons. We will cover the complete methodology of the tax advisory process in this blog, but first, let’s shed some light on what tax advisory services are and how they actually help you.

Essential Tax Advisory Services Explained

Tax advisory services go beyond the preparation of taxes; they facilitate companies and individuals to lower their tax burdens by offering intelligent tax advice and fixing all tax-related issues. Apart from that, they help businesses plan better for the future by offering transparent and real-time access to financial data that assists them in thoughtful decision-making. Tax advisors can be chartered accountants, certified tax consultants, or specialized tax lawyers. They offer customized solutions and address the tax-related concerns of both local and international taxpayers. Some of the positives of tax advisory services include:

• Minimize taxes by offering the right tax services as per the laws
• Protection from legal queries and a reduction in previously imposed penalties
• Complete guidance on payment arrangements and transparency in financial data
• Maximize contributions related to taxes to support national revenues
• Help in getting the applicable tax benefits, like credits and deductions
• Improve the timing of year-end income and deductions
• Find the previous year’s tax returns to detect if any amendments are required
• Fix any legal stumbling blocks, gaps in compliance, and deal with the external audit
• Implement the top-notch tech-savvy tools to keep systems always efficient

With their deep understanding of tax rules, they know how to keep their clients’ goals in line with regulatory needs. This process of tax advisory is not a one-time need, but an ongoing process that reshapes with the client’s business, goals, the economy, and the changes in tax guidelines.

Tax Advisory Process in Saudi Arabia

If we talk about tax advisory KSA, particularly, it is a structured perspective that is crafted to ease the tax needs of businesses and individuals to fully comply with Zakat, tax, and customs authority (ZATCA) rules and guidelines. Since the KSA taxation system is multiplex with corporate income tax, Value Added Tax (VAT), Withholding tax (WHT), Zakat, and Excise tax, it generally involves various stages:

1.     Initial Finding and Understanding of Client’s Needs

Tax advisors start by analyzing the business models, industry, and operations, and detect the applicative taxes legally like VAT, CIT, WHT, Excise Tax, and Zakat. They look into their ownership plans and any tax incentives available for their specific sector. If the business is operating across multiple countries, it understands their cross-border transactions and eligible DTAs.

2.     Tax Diagnostic and Risk Analysis

They thoroughly conduct health checkups to pick out any present or forthcoming gaps in tax compliance by reviewing the previous tax returns, financial statements, and invoices. They also recognize any risks of disputes with ZATCA to handle them proactively and evaluate the Saudi Tax Laws, transfer pricing guidelines, and international tax treaties.

3.     Tax Planning and Organization

They design the best methodical tax structures for local or foreign investors; they plan to handle withholding tax obligations for cross-border payments and offer smart advice on transfer pricing regulations to meet the needs of ZATCA. They know how to get most of the benefits of Saudi Arabia’s signed double taxation treaties (DTTs) and sort the routine transactions to cut down tax liabilities.

4.     Compliance and Reporting

For the smart preparation of on-time filing of VAT returns, Excise tax returns, corporate income tax returns, Zakat declarations, and withholding tax filing, they also make certain that all invoices are completely compliant under the ZATCA phase I and II implementation.

5.     Advisory on Zakat and Religious Obligations

Being fully familiar with religious obligations along with legal duties, they keep the Zakat also aligned with tax duties. They determine the Zakat vs corporate tax applicability for mixed ownership companies and compute the taxes accordingly.

6.     Representation and Dispute Resolution

They work as an extended part of internal teams; therefore, they represent their client in front of tax authorities during any audits and inspections. They keep the documentation prepared to present it in case of any legal queries and clarify the objections or disputes professionally. Still, in the event of any fines or penalties, they file appeals to protect the company from any financial or reputational damage.

7.     Consistent Monitoring and Updates

ZATCA repeatedly changes the rules and legislation to keep businesses in line with global standards and to modernize compliance in KSA. It’s unavoidable for companies to stay current with the changes, and tax advisors relieve this process by keeping them updated on the most recent guidelines and changes. They also train the finance teams according to the new ZATCA demands, monitor cross-border tax reforms, BEPS (Base Erosion and Profit Shifting) compliance, and OECD guidelines adopted by Saudi Arabia.

8.     Integration of Advanced Tools

They are not just well-equipped with advanced tools and software but also guide businesses on adopting the best technological solutions for e-invoicing, VAT compliance, and automated reporting. For the reduction of manual labor errors, they deploy cloud accounting and ERP solutions.

Hence, one can say that Tax Advisory KSA is not merely a process to file returns but about creating a business that is compliant with managed risks and best tax practices. They come with a ZATCA first mindset and shield every tax aspect of a business or individual.

Checklist Before Choosing a Tax Advisor

Tax advisory is only favorable if you hire the right tax advisor or one of the best accounting companies; otherwise, it won’t be of any help but drain your finances even more. So, it’s important to do your homework before finalizing a tax advisory service. The essential points to keep in mind while choosing the perfect match are:

Know your Needs

Before looking for an advisor, you must acknowledge your requirements. Do you just need basic accounting, which is limited to filing and returns only? Or do you need strategic tax planning, which includes wider services of cross-border structuring, transfer pricing, and international tax treaties? Do you just want advice to solve your tax disputes with ZATCA? Or do you require expertise in your specific sector to deal with its distinct tax requirements? Once you know your answer, you target advisors, precisely experts in those areas.

Check for Experience and Expertise

Always prefer the firms that are fully experienced in Saudi Tax laws, as KSA’s offer unique rules that differ from other jurisdictions. Make sure they know the ZATCA regulations, CIT, WHT, Excise tax, Zakat, and the FATOORA system of ZATCA. Having a good understanding of international regulations is a plus. If you are a multinational business, you should hire firms familiar with double taxation treaties to benefit you further.

Assess their Worth

Look closely while reviewing their credentials, and check if they are registered or licensed to take part in Saudi Business activities. Their affiliations with global networks are also preferred. Also, ask them about their professional advisor team’s qualifications, like CPA, CMA, CA, ACCA, or local Saudi certifications.

Review their Reputation and Track Record

Ask the clients for references and prefer the ones with a record in your same industry. Examine their online reviews and testimonials. Assure that they will be able to handle the ZATCA strict audits and appeals in a professional manner

Determine their Technological Procedures

They must be masterful in operating the digital systems of ZATCA, like FATOORA phase I and II. They should also be experts in ERP integration, tax software, and cloud computing. Ask if they will offer real-time dashboards for reporting and monitoring compliance. Opt for an innovative tax advisor with modern-day compatible digital accounting systems

Support Services and Availability

They must be committed to offering a dedicated support round the clock with the ability to communicate in Arabic and English fluently. They should be promptly responsive during tax seasons or to any urgent tax queries or audits.

Compare Pricing Models

Many accounting companies offer fixed packages, and some come with hourly rates. Choose according to your budget and needs. Read the contracts thoroughly, look for any hidden charges, and review the charges for added services. You must balance the cost against the value of expertise. A cheaper advisor will cost you more in penalties later; likewise, an expensive advisor might drain your finances, hence picking the one with a balance of both is critical yet mandatory.

Remembering all these objectives is necessary to have a compliant business and to get the most out of tax advisory services. The most common red flags to avoid are to never hire a firm that only promises “minimum tax” or “guaranteed zero tax”, is unfamiliar with local Saudi laws like Zakat, has lower ratings online, or lacks clarity in the fee structure.

Get in Touch with SS&CO KSA and Stay Away from All the Red Flags!

SSCOKSA is one of the top-rated accounting companies in KSA. What differentiates us from other firms is our client-centric and customized approach. We take your business as ours and don’t let you face the tax challenges alone. Our team knows how to make you stay compliant in the long run while still finding the best tax-saving possibilities that let you put your saved money into other important business needs. With us, you are not just avoiding the red flags, but you are creating a strong financial future. Get in touch with us today and experience the tax advisory KSA like never before.