Corporate income tax in Saudi Arabia
Saudi Arabia taxes the share of a resident company's profits attributable to non-Saudi and non-GCC shareholders at 20%. The share attributable to Saudi and GCC nationals is not subject to income tax and pays Zakat instead. Oil and hydrocarbon producers pay between 50% and 85% on a sliding scale. The annual return is due within 120 days of the fiscal year end.
Key facts
| Standard rate | 20% on the non-Saudi / non-GCC share of the tax base |
|---|---|
| Saudi and GCC share | Zakat at 2.5%, not income tax |
| Oil and hydrocarbon production | 50% to 85% |
| Return and payment | Within 120 days of the fiscal year end |
| Advance payments | Three instalments, due at the end of months 6, 9 and 12, each 25% of the prior-year tax net of tax withheld; not required where an instalment would be below SAR 500,000 |
| Authority | Zakat, Tax and Customs Authority (ZATCA) |
Opens the assistant with Saudi Arabia already selected. Answers cite the law, guidance and cases they rest on.
Mixed ownership
A company owned partly by Saudi or GCC nationals and partly by foreigners is a mixed company: its profit is split by shareholding, the foreign share is taxed at 20% and the Saudi share is subject to Zakat. A permanent establishment of a non-resident is taxed on its attributable profit at 20%.
Deductions and losses
Expenses are deductible where they are necessary, actual, documented and connected with taxable activity. Losses may be carried forward without time limit, but the amount used in any year is capped at 25% of that year's taxable profit, and a change of 50% or more in ownership or control restricts use unless the company continues the same activity. Related-party charges must meet the arm's length standard under the transfer pricing bylaws.
Frequently asked questions
- What is the corporate tax rate in Saudi Arabia?
- 20% on the share of profits attributable to non-Saudi and non-GCC shareholders. The Saudi and GCC share pays Zakat.
- When is the Saudi corporate tax return due?
- Within 120 days of the end of the fiscal year, together with payment of the balance.
Primary sources
Related guides
Disclaimer: This page provides general tax information based on publicly available primary sources, reviewed on the date shown. Rules are conditional and change; the page may not reflect a change made after that date, and it is not a substitute for advice from a qualified tax professional on your specific situation.