Saudi Arabia has no personal income tax — but businesses face corporate income tax, VAT, zakat, and withholding taxes. Here's everything you need to know.
Saudi Arabia has no personal income tax for individuals — neither Saudi nationals nor expats pay income tax on salary, investment income, or capital gains from personal assets. This is one of the Kingdom's most significant benefits for high earners.
Applies to foreign entity income and the foreign shareholder portion of mixed-ownership companies. Saudi-owned companies are not subject to CIT but pay Zakat instead. The effective rate for foreign investors in joint ventures depends on the ownership split.
The Islamic wealth tax applied to Saudi and GCC national-owned businesses at 2.5% of the Zakat base (broadly: net equity plus long-term liabilities). In a company with mixed Saudi/foreign ownership, zakat applies to the Saudi-owned portion and CIT applies to the foreign-owned portion.
Introduced in 2018 at 5%, raised to 15% in July 2020. Applies to most goods and services sold in Saudi Arabia. Businesses with annual taxable supplies exceeding SAR 375,000 must register for VAT. Monthly or quarterly filing depending on size.
Applied to payments made to non-resident entities for services performed in Saudi Arabia. ZATCA-published rates: management fees 20%; royalties 15%; technical and consulting services 5%; dividends 5%; interest 5%; rent 15%; insurance premiums 5%. Saudi Arabia has DTAAs with 50+ countries that can significantly reduce these rates — always verify your country's treaty position before structuring cross-border payments.
Applied at 5% on the value of real estate transactions (sale, transfer of ownership). Replaced VAT on real estate since 2020. Applies to both residential and commercial property transactions. The buyer typically bears this cost.
Withholding tax is deducted at source when a Saudi entity pays a non-resident entity. The Saudi company is responsible for withholding and remitting the tax to ZATCA within 10 days of the payment month-end.
| Payment Type | Standard Rate | Treaty Rate (varies) | Notes |
|---|---|---|---|
| Dividends | 5% | 0–5% | Reduced by many treaties |
| Interest / Finance charges | 5% | 0–5% | On loans from foreign entities |
| Royalties / IP licence fees | 15% | 5–15% | Common in tech and franchise arrangements |
| Management fees | 20% | 5–15% | Charged by foreign parent companies |
| Technical services | 5% | 0–5% | For services performed in/outside KSA |
| Insurance premiums | 5% | 0–5% | Paid to foreign insurers |
| Air/sea freight | 5% | 0–5% | International transport payments |
| Other payments to non-residents | 15% | Varies | Catch-all for unlisted categories |
Saudi Arabia has signed Double Taxation Avoidance Agreements (DTAAs) with 50+ countries including the UK, France, China, India, USA (limited), South Korea, and most GCC states. These treaties can significantly reduce withholding tax rates. Always check whether your home country has a treaty with Saudi Arabia before structuring cross-border payments.
Saudi Arabia imposes zero personal income tax on employment income, investment returns, and capital gains for individuals. This applies equally to Saudi nationals and expatriates — there is no distinction.
However, depending on your nationality and home country rules, you may still have tax obligations at home. Key examples:
Saudi Arabia applies a levy on international money transfers made by non-Saudi individuals (expatriates). The current rate is 6% of the transferred amount. This applies when you send money from your Saudi bank account to a foreign account.
Some employers gross up salaries to compensate for this tax. Check your contract — many senior expat packages include a remittance allowance or simply pay higher gross salaries to offset the cost.
Practical tip: You can reduce the remittance levy impact by spending more in-country (on rent, schooling, car) and remitting less, or by using salary in-country for large purchases rather than converting and sending home.
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The information on this page is drawn from official Saudi government bodies and regulatory authorities. Regulations change frequently — verify current requirements directly with the relevant authority before making any legal, financial, or business decisions.