The Zakat, Tax and Customs Authority (ZATCA) of Saudi Arabia has issued new guidelines on 04 February 2024 clarifying the tax treatment of software payments under the Income Tax Law. These guidelines aim to address the complexities surrounding the taxation of software transactions, particularly in cross-border scenarios. This document explores the key aspects of these guidelines, including the classification of software payments, the approaches taken by international organizations, and the implications for businesses operating in Saudi Arabia.