Saudi Arabia’s financial sector is central to Vision 2030, with the Financial Sector Development Program (FSDP) driving growth by advancing fintech, strengthening financial institutions, and increasing private sector participation. Regulatory reforms, digital innovation, and financial inclusion efforts have promoted expansion across banking, insurance, investment funds, and capital markets. Developments like open banking and the rise of digital banks are steadily positioning the Kingdom as a regional financial hub.

However, this growth brings nuanced tax challenges, which emerge from increasingly complex structures, cross-border operations, as well as digitization. Navigating areas like transfer pricing, indirect taxation, and international tax planning has become more critical, requiring specialized expertise and deep sector understanding.

KPMG is in step with the financial sector, considering it a priority sector within our tax practice. With longstanding experience supporting financial institutions on both common and complex tax matters, we offer tailored support to help clients in the financial sector steer through a changing landscape.

Our tax services cover the following:

• Transfer pricing support: Our support includes designing and reviewing pricing frameworks for intra-group transactions, conducting policy and gap assessments, and preparing documentation aligned with local regulations and global standards.
• Cross-border tax and M&A support: We advise on tax-efficient structures for international operations, manage withholding tax and treaty benefits, and support mergers, acquisitions, and restructurings to optimize tax outcomes. 
• Tax risk management: We assist in developing tax strategies that define risk appetite and identify key risk categories. Given the sector’s exposure to regulatory, market, and reputational risks, we implement tools for identifying and reporting tax risks to enable timely remediation and strengthen governance.
• AEOI health check: We conduct detailed reviews of processes and procedures to ensure compliance with the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS), identifying gaps and recommending improvements.
• Private client tax services: In partnership with banks and wealth managers, we provide tailored tax services to ultra-high-net-worth individuals, aligned with their investment profiles and needs.
• Tax advisory: We help financial institutions establish internal tax processes and provide expert guidance on product and service reviews, cross-border transactions, tax transparency, revenue recognition, and economic substance.
• Tax compliance: We provide comprehensive tax and Zakat compliance services, including return preparation and filing, with expertise in rules governing the FS sector, including banks and both direct and indirect financing funds.
• Indirect tax support: We provide VAT guidance on financial products and services, covering both conventional and Islamic finance structures, and support clients in determining the optimal VAT apportionment methodology. Our advice also extends to real estate transaction tax (RETT) matters for property-related transactions, foreclosures, repossessions, and share transfers in entities operating within the financial and real estate sectors.
• Pillar Two impact assessment: We help financial institutions in the Middle East assess exposure across diverse structures, model ETR impact, evaluate data readiness, and advise on restructuring options to manage global minimum tax risks.
• Fintech advisory: We deliver tailored advisory and structuring solutions for fintech models, ensuring tax efficiency and regulatory compliance with SAMA and ZATCA across activities such as digital payments, lending, and Insurtech.
• Tax refunds: We help financial institutions in Saudi Arabia recover WHT, CIT, and VAT through targeted refund strategies, providing support across jurisdictions with overpayment claims, exemptions, and both treaty and domestic relief