Verified Facts
The tax rates in Saudi Arabia range from 0% to 20% for individuals, with a standard corporate tax rate of 20% and a Value-Added Tax (VAT) rate of 15%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Saudi Arabia has a territorial taxation system, where individuals and companies are taxed only on their Saudi-sourced income. The country has a relatively simple tax system, with a focus on zakat (Islamic charitable giving) and taxation of businesses. To be considered a tax resident in Saudi Arabia, an individual must have a permanent home in the country or stay in the country for more than 183 days in a calendar year.
The tax system in Saudi Arabia is designed to encourage foreign investment and economic growth. The government has introduced various incentives, such as free zones and special economic zones, to attract businesses and investors. The tax authority in Saudi Arabia is the General Authority of Zakat and Tax (GAZT), which is responsible for collecting taxes, enforcing tax laws, and providing tax services to individuals and businesses.
Personal Income Tax
| Income Bracket (SAR) | Tax Rate |
|---|---|
| 0 - 170,000 | 0% |
| 170,001 - 300,000 | 5% |
| 300,001 - 500,000 | 10% |
| 500,001 - 750,000 | 15% |
| 750,001 and above | 20% |
Individuals in Saudi Arabia are entitled to various deductions and allowances, such as a personal allowance and charitable donations. Tax returns must be filed annually, and the tax year runs from January to December. Individuals can file their tax returns online through the GAZT website or through a tax agent.
Corporate & Business Tax
- The standard corporate tax rate in Saudi Arabia is 20%, applicable to all companies, including small and medium-sized enterprises (SMEs).
- Small business incentives are available, such as exemptions from certain taxes and fees, to encourage entrepreneurship and job creation.
- Free zones offer various tax incentives, including exemption from income tax, to attract foreign investment and promote economic growth.
- Companies must register with the GAZT and obtain a tax identification number to conduct business in Saudi Arabia.
- Value-Added Tax (VAT) is applicable to most business transactions, with a standard rate of 15%.
VAT / Sales Tax
- The standard VAT rate in Saudi Arabia is 15%, applicable to most goods and services.
- Reduced rates of 0% and 5% apply to certain goods and services, such as food, healthcare, and education.
- Exemptions are available for certain transactions, such as financial services and real estate sales.
- Tourist refund schemes are available, allowing tourists to claim a refund of VAT paid on certain purchases.
For Expats & Foreign Workers
- Tax residency rules apply to expats and foreign workers, who are considered tax residents if they stay in Saudi Arabia for more than 183 days in a calendar year.
- Double taxation treaties are in place with over 50 countries, to avoid double taxation of income earned by expats and foreign workers.
- Social security contributions are applicable to expats and foreign workers, with a contribution rate of 10% of salary.
- Remittance rules apply to expats and foreign workers, who are allowed to remit a certain amount of money outside Saudi Arabia each year.
- Tax-free allowances are available for expats and foreign workers, such as a housing allowance and transportation allowance.
Crypto & Investment Income
- Investment income, such as dividends and interest, is subject to taxation in Saudi Arabia.
- Cryptocurrency is considered a commodity and is subject to taxation, with gains from cryptocurrency transactions taxable as capital gains.
- Dividends received from Saudi companies are subject to a withholding tax of 5%.
- Capital gains tax is applicable to gains from the sale of assets, such as real estate and securities, with a tax rate of up to 20%.