How Can We Avoid TDS Deductions on Intern Stipends in Saudi Arabia? Seeking Advice and Resources

Hi All, I want to know about the internship payout. We hire interns, and based on their qualifications, we have a fixed stipend for them. For the stipend, they raise an invoice to us every month, and the accounts team deducts 10% TDS and pays the remaining amount to our interns, for which they provide a TDS certificate after the completion of the financial year. Can you suggest a way in which our accounts department does not deduct TDS from their stipend? Also, if you could provide a supporting link for the same, that would be fantastic.

Thanks.

Location: Jubail, Saudi Arabia

Tags: Country-Saudi-Arabia, City-Saudi-Arabia-Jubail, no TDS, financial year, TDS deduction

To address the issue of TDS deduction from the stipend of your interns, especially in Saudi Arabia, it's crucial to consider the local regulations and tax laws related to such payments. Here are some steps you can take to explore the possibility of not deducting TDS from the interns' stipend:

1. Consult with Tax Authorities:
- Reach out to the tax authorities in Saudi Arabia to understand the specific regulations regarding TDS deductions for intern stipends. They can provide clarity on whether there are any exemptions or alternative procedures for such payments.

2. Legal Review:
- Seek legal advice from a tax consultant or legal expert well-versed in Saudi Arabian labor laws. They can guide you on any legal provisions that may allow for TDS exemption in certain circumstances.

3. Structuring Payments:
- Explore the possibility of structuring the intern stipend in a way that falls under a category exempt from TDS deductions. This may involve aligning the payment method or frequency with specific criteria outlined in the tax laws.

4. Formal Application:
- If there are provisions for exemption, consider submitting a formal request or application to the relevant tax authorities seeking approval for not deducting TDS from intern stipends. Ensure the application includes all necessary details and justifications.

5. Documentation and Compliance:
- Maintain thorough documentation of the communication with tax authorities, legal advice received, and any formal applications made regarding the TDS exemption. Compliance with local regulations is essential to avoid any potential issues in the future.

By following these steps and seeking guidance from the appropriate authorities, you can explore avenues to potentially avoid deducting TDS from the stipend of interns in Saudi Arabia. However, it's crucial to ensure full compliance with all relevant laws and regulations to mitigate any risks or penalties.