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Overview of Tax Issues for Expats in Saudi Arabia

Submitted: July 2014

The Saudi Arabian tax year generally runs from the 1 January to the 31 December.

 

Tax Residence

Generally you will be considered resident in Saudi Arabia if you are present for 183 days or more in one year. You may also be considered resident if you have a permanent home in Saudi Arabia, and are present in the country for 30 days or more in one year.

 

Employment/Business Taxes

Saudi Arabia does not impose tax on employment earnings of either resident or non-resident employees. If you are self-employed you will be taxed on your net income at varying rates. For more details please see: Taxation - Employment Taxation for Expats in Saudi Arabia.

Corporate tax is charged at a rate of 20% in Saudi Arabia. This rate does not apply to companies involved in investment in the gas industry, who are subject to Natural Gas Investment Tax (NGIT) at rates of 30% to 85%. An 85% rate of corporate tax applies to companies involved in the production of hydrocarbons. Companies may have to pay provisional tax during the course of a year. Companies are also responsible for the collection of withholding tax from payments to non-resident entities. After the end of the year a tax return must be produced within 120 days of the end of the fiscal year in which the income was generated. For more details please see: Taxation - Business Taxation for Expats in Saudi Arabia.

 

Other taxes

There is generally no tax payable on investment income in Saudi Arabia. Withholding taxes may be applied on interest, dividends and rental income paid to non-residents. There is no capital gains tax in Saudi Arabia, other than on the sale of shares in a Saudi company or partnership. For more details please see: Taxation - Investment Taxation for Expats in Saudi Arabia.

 

Tax treaties

Saudi Arabia has signed tax treaties with over 25 countries worldwide. Saudi Arabia charges withholding tax on dividends, interest or royalties. Withholding taxes rates can be reduced on payments made to taxpayers in other countries which have tax treaties with Saudi Arabia in place (or non-residents in Saudi Arabia). The treaties also mean that the amount of withholding tax charged by the originating country on money flowing into Saudi Arabia can be reduced. For more details please see: Taxation – Tax Treaty Considerations for Expats in Saudi Arabia.

 

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