The corporate tax rate in Saudi Arabia is set at 20%. The corporate tax rate in this country averaged 24.72% from 1999 to 2016, achieving an all time high of 45% in 1999 and an all time low of 20% in 2006. In this article, our company formation advisors in Saudi Arabia explain different aspects related to the corporate tax in this country.
Who is subject to the corporate tax in Saudi Arabia?
In Saudi Arabia, only foreign investors are subject to income taxation. Most of the times, local investors, as well as citizens of GCC states, who are considered to be local citizens for the local tax purposes, are subject to Zakat, which is an Islamic assessment.
In those cases when a business is owned by both local and foreign shareholders, the portion of the taxable income attributed to the local interest must acquit the income tax, while the local share is taxed with the Zakat assessment.
Under the Income Tax Law in Saudi Arabia, the income tax must be acquitted by:
• A resident capital business to the extent of its foreign shareholding;
• A resident foreign natural individual who effectuates his or her activities in the country;
• A foreign individual who effectuates his or her activities in the country through a permanent establishment;
• A foreign individual who receives other income subject to tax from sources in the country;
• An individual who activates in the natural gas investment sectors;
• An individual who activates in the oil and other hydrocarbon production field;
• A resident capital business in the extent of its shares owned directly or indirectly by individuals who operate in the oil and hydrocarbon production. Our company registration consultants in Saudi Arabia can provide further information related to this matter.
Other corporate taxes in Saudi Arabia
Other corporate taxes in Saudi Arabia include:
- Dividends tax: received dividends are taxed as income;
- Capital gains: the disposal of shares in a resident company is taxed with 20%. Our Saudi Arabia company formation agents can offer more details on the capital gains tax. We also provide assistance in setting up a company in Saudi Arabia;
- Surtax: Saudi Arabia does not impose any surtax;
- Foreign tax credit: it does not allow any foreign credit tax.
Our team of accountants in Saudi Arabia can help you with tailored services.
For more details about the taxes on corporate income in Saudi Arabia, or for help related to opening a company here, please speak to our friendly company formation representatives in Saudi Arabia.