Saudi Arabia levies corporate income tax on the non-resident’s share of taxable profit from a permanent establishment (PE) based in the Kingdom. This applies to both foreign owned LLC’s and branches and is currently subject to 20% corporate income tax in addition to 5% withholding tax (WHT) applied to the distribution of dividends which are taxed as income. The tax base is considered the income arising from an organisation’s commercial activities less allowable expenses.
Saudi and GCC nationals in corporate structures are subject to Zakat a religious levy derived from the ‘Zakat-able Base’, determined by a formula linked to the number of shares of the company and other values. This is currently 2.5%
Capital gains tax is also 20% and generally imposed on the disposal of shares in a resident company by a non-Saudi although there are some notable exceptions to this around trading stocks and intercompany exemptions.
What are the current tax obligations when operating a business in Saudi Arabia? Find more details here: www.propartnergroup.com/blog/2021/10/tax-for-companies-in-saudi-arabia-ksa
If you need assistance in corporate tax or any other related PRO matter please contact a member of the PRO Partner Group team who will be happy to help, use the contact form below or all us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, or email us at firstname.lastname@example.org.
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