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Saudi Arabia Signs 56 Agreements to Prevent Double Taxation

Saudi Arabia is seeking to expand agreements with other countries to avoid double taxation. (Asharq Al-Awsat)
Saudi Arabia is seeking to expand agreements with other countries to avoid double taxation. (Asharq Al-Awsat)
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Saudi Arabia Signs 56 Agreements to Prevent Double Taxation

Saudi Arabia is seeking to expand agreements with other countries to avoid double taxation. (Asharq Al-Awsat)
Saudi Arabia is seeking to expand agreements with other countries to avoid double taxation. (Asharq Al-Awsat)

In line with Vision 2030, Saudi Arabia is seeking to strengthen its international presence by attracting foreign capital for investment, obtaining tax exemptions for government investments, and exchanging customs information.

Asharq Al-Awsat obtained a copy of a recent report issued by the Zakat, Tax and Customs Authority which showed that the Kingdom has taken great steps to enhance international cooperation in matters related to customs regulations, including the signing of 56 double taxation avoidance agreements until the end of 2021.

Moreover, Saudi Arabia concluded two agreements for cooperation and mutual assistance in customs matters, and seven other customs cooperation agreements.

Agreements on the Double Taxation Avoidance with Gabon, Switzerland and Latvia entered into force in February, April and July of 2021, respectively, to facilitate cross-border investment and trade.

In March 2021, Saudi Arabia signed an agreement to avoid double taxation with Iraq and Taiwan.

According to the report, the Zakat, Tax and Customs Authority also forged two agreements on cooperation and mutual assistance in customs matters with Azerbaijan and Singapore.

Saudi Arabia was able to maintain its membership in the Customs Policies Committee and the Finance Committee of the World Customs Organization (WCO), after agreeing with the countries of the North Africa, Near East, and Middle East region in the 56th regional coordination meeting, which was held recently at the headquarters of the WCO in Brussels.

The Customs Policy Committee is concerned with drawing up the organization’s policies by submitting its recommendations to the Council.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.