Tax Identification Number (TIN) In Saudi Arabia: A Complete Guide

The TIN is not simply a number issued by the Zakat, Tax and Customs Authority to businesses; it is involved in numerous transactions and tax obligations in Saudi Arabia. Therefore, it is essential to understand what a TIN is, when your business needs it, how to obtain it, and how to cancel it.

This article will explain what a TIN is in Saudi Arabia, its components, why your business needs it, its most prominent uses, and the challenges your business will face if it does not have one.

What Is a Tax Identification Number (TIN) In Saudi Arabia?

The TIN for a company or establishment consists of 10 digits and is issued by the Zakat, Tax and Customs Authority to identify the establishment in its dealings with the Authority. In many procedures, such as transactions related to zakat and taxes.

What Is The Format Of The Tax Identification Number (TIN)?

The TIN consists of 10 digits and is used as a reference number to identify the establishment with the tax and customs authorities. It comprises three main parts: the number indicating the GCC country to which the establishment belongs; the second part consists of eight sequential digits; and the final part is the verification number.

Importance Of The Tax ID For Businesses In KSA

• The Tax Identification Number (TIN) is a crucial identifier for businesses with the Zakat, Tax and Customs Authority, as it facilitates business identification and links transactions and data to the business's file with the Authority.
   
• The TIN facilitates government transactions by enabling companies and establishments to easily complete electronic services related to filing tax returns, paying fees, and paying zakat.
   
• It also helps ensure regulatory compliance and avoid violations by verifying that establishments adhere to the economic regulations and laws of the Kingdom of Saudi Arabia.
   
• Furthermore, the TIN helps establishments manage their financial records by supporting the organization and maintenance of the business entity's tax and zakat records throughout the period.

Uses Of The TIN In Saudi Arabia

Some of the most important uses of the TIN in Saudi Arabia are as follows:

• The Tax Identification Number (TIN) is used to link your establishment's data and transactions to its tax file in the Authority's systems.
   
• It is used when establishments wish to inquire about Zakat and income tax entitlements, and it is also essential for accessing certain services related to the taxpayer's file.
   
• It is used as one of the customer identifiers in electronic invoices, in addition to other identifiers such as the national ID number or tax number. It should be noted that the TIN does not replace the tax number.
   
• It facilitates internal integration between systems, as some processes for linking Zakat, Tax and Customs Authority services rely on the TIN to identify the establishment.

How Can I Get My TIN Number In Saudi Arabia?

To get your TIN Number, follow these steps:

1. Log in to the Zakat, Tax and Customs Authority website at the following address: https://zatca.gov.sa/ar/login/Pages/login.aspx
    
2. Go to Electronic Services and then select the Zakat and Tax services relevant to your file.
    
3. Go to File Data/Certificates, where you will find the unique number next to your Tax ID and Commercial Registration Number.
    
4. You can also verify your VAT registration by searching using your Commercial Registration Number. Businesses can locate their tax file and thus access their TIN from within their account.

How To Cancel A Tax Identification Number

Businesses in Saudi Arabia are required to cancel their TIN in the following cases:

You can follow these steps to cancel your TIN:

1. Log in to the Zakat, Tax and Customs Authority website.
    
2. Go to e-services.
    
3. Select the TIN cancellation service by logging in.
    
4. Log in using your TIN, email address, and password, or the National Unified Access Platform for Individuals.
    
5. You will receive a verification code via SMS.
    
6. Select Zakat and Tax Administration from the menu at the top.
    
7. Select Zakat and Income Tax Services.
    
8. Select Update/Cancel Registration.
    
9. Select Cancel TIN.
    
10. Select the reason for cancellation from the list.
     
11. Agree to the cancellation details.
     
12. Attach the required attachments to cancel the TIN.
     
13. Fill in the declaration form, including your name, contact number, title, and date, and then agree to the declaration.
     
14. Review and confirm to complete the request.
     
15. A notification will appear confirming receipt of your cancellation request.

TIN Number vs. VAT Number

Through my experience working with numerous Saudi companies, I've found it very easy to confuse the TIN with the VAT number. One particularly striking instance involved a client preparing to work with a company for the first time. The company requested the client's TIN, and the client contacted me to confirm it. However, when I reviewed the information, I discovered that the client mistakenly believed the TIN was the same as the VAT number. Therefore, I reviewed the company's data and clarified the difference between the 15-digit VAT number and the 10-digit TIN, which serves as a reference number for identifying the company to the Zakat, Tax, and Customs authorities.

From the above, I've observed that many clients confuse these two numbers, which can lead to errors in submitted tax data, failure to meet invoice requirements, and consequently, penalties and fines.

The following table illustrates the difference between a TIN Number and the VAT Number and how to distinguish between them in several ways.

What Happens If I Don't Have A TIN?

If you do not have a unique identification number, the following consequences will occur:

• Not possessing official identification from the relevant authority: A TIN is used to identify the establishment. Therefore, not having this number will completely halt all tax, zakat, and customs transactions.
• Inability to link your systems to the Fatoora platform: The second stage of electronic invoicing relies on the TIN and the Value Added Tax (VAT) number. Any error or omission in these will subject you to penalties.
• Not having a Tax ID number: Not having a TIN prevents you from obtaining a tax ID number and, consequently, from registering for VAT, as the unique identification number is essential for registration. This will subject you and your establishment to penalties for non-registration.
• Inability to deal with customs: Because the TIN links the customs and tax systems, its absence will halt all import, export, and customs clearance transactions.
• Inability to track your zakat obligations: The TIN is the sole and essential reference for tracking zakat payments.

Read Alos: How to Calculate VAT in Saudi Arabia

How does Daftra help you comply with tax regulations in Saudi Arabia?

Daftra Accounting Software can help you comply with tax regulations through several important features, including:

• Full support for the first and second stages of electronic invoicing via dedicated API files that send electronic invoice data to the authority.
   
• The ability to issue fully compliant invoices, thus conforming to the authority's approved templates.
   
• Automatic issuance of each invoice containing essential information and data, such as the tax identification number, a unique invoice serial number, the invoice date and time, item details, and VAT calculated separately from the total.
   
• Automatic addition of a QR code, with full control over invoice design.
   
• Prevention of tampering with or deletion of any invoice issued through the Daftra system.
   
• Automatic application of all Zakat, Tax and Customs Authority updates to your account.