Before entering the Saudi market, understanding the tax landscape is crucial for planning your investment.

Saudi Arabia offers a competitive tax environment for foreign investors, but it's essential to know which taxes apply, who they affect, and how to stay compliant.
This guide covers the most important taxes that impact businesses and individuals when investing in the Kingdom.

1. Corporate Income Tax

Corporate income tax is levied at a flat rate of 20% on the net income of Saudi entities owned by non-GCC shareholders.
A non-GCC shareholder is any individual that is not a national of the six Gulf Cooperation Council (GCC) countries: Saudi Arabia, UAE, Kuwait, Qatar, Oman, and Bahrain.

• Corporate income tax applies only to the foreign ownership share
• GCC nationals are treated as Saudi and exempt
• In case of mixed ownership by Saudi/GCC nationals and foreign (non-GCC) shareholders:
  • The foreign portion is subject to 20% corporate tax on net taxable profit
  • The GCC portion is subject to zakat at 2.5% of the zakat base

2. Zakat

Saudi-owned and GCC national-owned companies are subject to Zakat instead of corporate tax.
Zakat is a religious wealth tax, currently calculated at 2.5% on the Zakat base.

3. Value Added Tax (VAT)

Saudi Arabia implements a 15% VAT on most goods and services.
Businesses with taxable supplies exceeding SAR 375,000 annually must register for VAT.

• VAT is recoverable on business-related purchases
• Zero-rated and exempt supplies exist (e.g., exports)

4. Real Estate Transaction Tax (RETT)

RETT applies at a rate of 5% on the value of real estate transactions.

• Applies to sale or transfer of ownership
• Exemptions exist for certain transfers (e.g., inheritance, first sale by real estate developer)

5. Customs Duties

Imported goods are subject to customs duties ranging from 5% to 25%.
Some goods may enjoy exemptions under investment or industrial licenses.

6. Withholding Tax (WHT)

WHT is imposed on payments made by Saudi-based businesses to non-resident parties.
The rates vary depending on the nature of the payment:

• 5% on dividends
• 15% on royalties
• 15% on technical and consultancy services
• 20% on other services if not covered by tax treaties

7. Branch Remittance Tax

Foreign company branches in Saudi Arabia are subject to a 5% remittance tax on profits transferred abroad.

• Applies only to foreign branches, not Saudi-incorporated companies
• Calculated on the remitted amount, not total profits
• Not applicable to local reinvestments

8. Tax Credits

Withholding tax and branch remittance tax are paid on behalf of foreign recipients and cannot be deducted or offset against Saudi corporate income tax.
However, foreign recipients may seek credit abroad under their local tax laws or tax treaties.

Tax Treaties

Saudi Arabia has signed numerous Double Tax Avoidance Agreements (DTAs) with other countries to avoid double taxation and reduce WHT rates.

Plan smart, invest smarter — let start easy. guide you through the Saudi tax system.