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Counterparty
In the Capital Market Institutions Regulations, and in the definition of the term “institutional client” contained in the Glossary of Terms, it means any of the following: the Monetary Agency, the Market, or any financial market recognized by the Capital Market Authority (CMA), the Depository Center, the Clearing Center, the Capital Market Institution, the Local Bank, the Local Insurance Company, the Qualified Foreign Investor, and the Non-Saudi Financial Services Facility. Otherwise, the counterparty means the other party to a transaction.
Tax Guarantee
Cash or bank guarantee requested by the Zakat, Tax and Customs Authority from the taxable person to ensure the fulfillment of his tax obligations. This is done through a written notification to the person containing the type of guarantee required, its value and its duration, in accordance with the provisions contained in the Executive Regulations of the Value Added Tax System.
Representative Member
The taxable person in a tax group who submits an application to the Zakat, Tax and Customs Authority to form it. The representative member of the tax group is one of the group members, and is the person authorized by the other members to represent the tax group in all its tax affairs. He is responsible for the obligations and rights of the group on behalf of all its members, such as submitting tax returns, without prejudice to the joint liability of the other group members.
Remaining Estimated Useful Life
Defined for Value Added Tax (VAT) purposes, in relation to capital assets that are sold or used in non-economic activities before the end of the relevant adjustment period, it is defined as: the adjustment period (determined in accordance with the second paragraph of Article 52 of the VAT Executive Regulations) less the number of years in which the taxable person used this capital asset.
Tax Group or Value Added Tax (VAT) Group
A group of two or more legal persons resident in Saudi Arabia, who are treated as being a single taxable person for Value Added Tax (VAT) purposes and registered for VAT with a separate and new Tax Identification Number (TIN) issued by Zakat, Tax and Customs Authority (ZATCA) to the tax group representative on behalf of the tax group.
General Business Risk Management
The risks and potential losses arising from the Exchange or Depository Center’s operation as a business, but excluding risks and losses related to an Exchange or Depository Center’s default Member. General Business Risk includes any potential impairment of the Exchange or Depository Center’s financial position as a consequence of a decline in its revenues or an increase in its expenses.
Accountability
The procedure applied to public sector entities and their employees: to hold them accountable for their decisions and actions, including oversight of public funds and all aspects of performance, and to subject them to appropriate external review. Accountability is achieved when all parties understand their responsibilities, roles are clearly defined, and a strong structure is in place. Accountability is thus the obligation to answer for responsibility.
Free Trade Area
Any entity formed by the customs territories of a group of countries, which in its final form has the following characteristics: The elimination of customs duties on products originating in any of the countries in the region. Each country retains its own customs tariff and customs law. Each country in the region remains autonomous in its customs affairs and economic policy. Trade is based on the application of rules of origin, so that different customs tariffs are taken into account and trade indicators are not distorted. Trade restrictive regulations within the free trade area are abolished.
Output Gap
The difference between the actual output of an economy and its potential output at full capacity, indicating whether the economy is underperforming or overheating.
Ruling
A mechanism used by a taxpayer or taxable person to request a reliable opinion from the Zakat, Tax and Customs Authority (ZATCA) regarding the interpretation of the texts of the regulations, executive regulations, instructions, or international agreements to which the Kingdom is a party, regarding matters related to the economic activity that he currently manages or plans to start.
General Purpose Financial Statements
It is a structured expression of an entity's financial position and performance. It aims to meet users' needs by providing information about an entity's financial position, financial performance, and cash flows, which is useful to a wide range of users in making and evaluating decisions related to resource allocation.
Worth Index
A metric that measures how “worth it” a product or experience is to a customer. It can be explained by analyzing the 5 key Decision Drivers (Price, Social Proof, Quality, Relationship, Brand Identification) and determining the impact that specific experiences have on the customer’s decisions.
Related Advisor
An advisor that is advising the offeror or the offeree company in relation to an acquisition (whether through a private transaction or an offer); a Capital Market Institution acting for the benefit of the offeror or the offeree company; and an advisor that is advising a person who is acting in concert with the offeror or the offeree company in relation to an offer or in relation to the matter which is the reason for that person being a member of the relevant concert party.
Customs Territory
The part of land or sea subject to specific customs control and procedures, including: Maritime customs zone: Includes the sea area between the shores and the end of the territorial waters. Land customs zone: Includes the land between the shores or land borders on one side, and an internal line on the other side, determined by a decision of the minister or the competent authority.
Acting in Agreement
In the Rules on the Offer of Securities and Continuing Obligations, actively co-operating, pursuant to an agreement or understanding (whether formal or informal) between persons, to acquire interest in or exercise voting right in the shares or in the convertible debt instruments of the issuer.
Passenger Transport
A transport service where one or more passengers are transported in any vehicle, regardless of whether the vehicle is designed for passenger transportation or the supplier is licensed to provide passenger transport. Any goods carried with a passenger is part of passenger transportation.
Invitation Type
The type of tender invitation issued by the government to the private sector. It includes a general invitation to the entire private sector, which any company wishing to compete may apply for, and a special invitation to certain private sector companies, allowing them to apply for the tender.
Constructive Obligation
An obligation that derives from an entity’s actions where an established pattern of past practice, published policies, or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
Study of Government Real Estate Needs
Studying the real estate needs of government entities, evaluation of utilized and unutilized properties, and study of relevant requests, then determining how such need is fulfilled, either through allocation or lease.
Exempt Income
Some forms of non-taxable income, such as capital gains from the disposal of securities, as well as gains resulting from the disposal of property other than business assets, in accordance with the Income Tax Law and its Executive Regulations.
Investment Grade
The rating category associated with relatively low default risks granted by recognized credit rating agencies.
Deferred Payment
A payment system that enables a customer to make a purchase at a participating retailer and choose to buy now, pay later.
Country of Tax Jurisdiction
The country in which the person is subject to tax or the jurisdiction in which a person is considered a person subject to tax or a taxpayer pursue- ant to the laws of that jurisdiction.
Beneficiary Intelligence
The process of collecting, analyzing, and leveraging data and insights about beneficiaries to make informed business decisions. It involves gathering information from various sources to understand customer behaviors, preferences, and needs.
Economic Leverage
The use of borrowed capital (debt) to amplify returns on investment, often referred to as the debt-to-equity ratio.
Zakat Assessment
A decision by the Zakat, Tax and Customs Authority that discloses its acceptance of the declaration or its amendment according to the information available to it, and the applicable procedures in ZATCA.
First Quarter (Q1)
The first period of the year is the time span from January to March. During this period, economic performance for the early months of the year is assessed, and financial reports and corporate performance for the first three months are typically presented.
Second Quarter (Q2)
The second period of the year is the time span from April to June. This period is used to assess the economic growth that takes place after the first quarter, and it includes many reports on mid-year performance analysis.
Third Quarter (Q3)
The third period of the year is the time span from July to September. This period is important for reviewing economic performance and annual growth as the year progresses. Focus is placed on forecasts and future trends.
Fourth Quarter (Q4)
The fourth period of the year is the time span from October to December. This period typically sees a comprehensive review of the second half of the year and is used to provide final financial reports, including annual assessments of profits and losses.
Beneficiary Journey
All interactions and steps a beneficiary goes through, starting from the discovery stage up to receiving support or service.
Beneficiary Journey Mapping
A visual representation of the steps and touchpoints the customer.
Non-Investment Grade
Bonds or securities with credit ratings below investment-grade, indicating higher risk.
Live Chat
A system for serving beneficiaries online, which includes an instant messaging tool, a support and assistance tool, as well as the ability to analyze data on the web.
Commercial Books
A set of Records and accounting kept by the taxpayer, in which he records all the details of his business activities.
Economic Cycle
The recurring periods of expansion and contraction in an economy, including phases of growth, peak, recession, and shrinking.
Digital Services Life Cycle
All stages that the digital service goes through, such as: discovering beneficiary requirements and current challenges, defining digital services, designing service delivery procedures and channels, releasing it to beneficiaries, managing it and measuring its performance.
Government Related Entity Debt (GRED)
Debt issued by entities affiliated with the government, such as state-owned enterprises, that can impact the government's overall financial position.
Government Debt
The total amount of money owed by a government, typically in the form of bonds and other financial instruments, which may be issued to finance budget deficits.
Priority Debt
A type of debt that has a higher priority for repayment in the event of a borrower's default. It is considered less risky than subordinated debt.
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