Taxation

The Saudi Arabian government's Department of Zakat and Income Tax is responsible for collecting profit corporate taxes in the Kingdom.

 

While salaries and wages are free from income tax, Saudi citizens and companies must pay a religious tax, called zakat, of 2.5% a year on income and profits. Foreign individuals and companies are exempt.

The Ministry of Finance determines a company's tax status. Business and professional income is normally taxed at 20%, but any corporate losses can be carried forward to offset future taxes.

Capital, profits and dividends can be repatriated to other countries, subject to a withholding tax of 5% - 15%, depending on factors such as type of business.

Saudi Arabia is a member of the Gulf Cooperation Council (GCC), which has no internal tariffs but a unified 5% tariff on most imported goods. It is also a member of the wider Greater Arab Free Trade Area (GAFTA).

Import duties are not payable when imported products are processed in Saudi Arabia and then re-exported, or if they are for industrial use and cannot be sourced from within the Kingdom.

© Copyright 2012 National Industrial Clusters Development Program. All rights reserved.