All entities who are not resident and provide services or trade across the Kingdom are subject to WHT ranging from 5% and 20% depending on the service. Accordingly, WHT is imposed on the total amount paid to the non-resident entity, notwithstanding expenses incurred to make that income and any rate reduction under a tax treaty.
Often service providers are not aware of the tax structure across the Kingdom, therefore the notion of withholding tax is often omitted from the contractual agreement and invoicing. It is important to understand these tax obligations, ensuring this is effectively documented and accounted for alongside the original fees agreed. Failure to do so could result in a tax liability of up to 15% of the fee value for the service provider.
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, withholding 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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