Tax
No personal income tax, with zakat, corporate tax and VAT
There is no personal income tax. Saudi and GCC-owned businesses pay zakat, foreign-owned businesses pay corporate income tax, and VAT is charged at fifteen per cent.
Key rules
- Jurisdiction — Zakat, Tax and Customs Authority (ZATCA). Disputes go to the tax dispute resolution committees and then to appeal.
- Deadline — 120 days after year end to file the annual income tax or zakat return
- Deadline — Monthly or quarterly VAT returns depending on turnover
Governing law
- Income Tax Law 2004Royal Decree M/1
- VAT Law 2017 — rate raised to 15% in July 2020
- Zakat Implementing Regulations
- Real Estate Transaction Tax 2020
In practice
The zakat and corporate tax split by ownership is the point most often missed: a mixed Saudi and foreign owned company is assessed on both bases in proportion to its shareholding, so ownership structure has an immediate and significant tax consequence. The headline VAT increase from five to fifteen per cent in 2020 was unusually large and dated transaction advice is frequently wrong on rate. ZATCA's Fatoora e-invoicing mandate is now a compliance obligation with real penalties rather than a technical preference.