Withholding tax in Saudi Arabia
Saudi Arabia withholds tax on payments made by a resident to a non-resident for services performed or income sourced in the Kingdom. The domestic rates under the Income Tax Law are 5% on dividends, interest, rent, technical and consulting services and insurance premiums, 15% on royalties and most other payments, and 20% on management fees. A double tax treaty can reduce these rates.
Key facts
| Dividends, interest, rent | 5% |
|---|---|
| Technical and consulting services | 5% |
| Royalties | 15% |
| Management fees | 20% |
| Other payments to non-residents | 15% |
| Monthly filing | Within the first ten days of the month following payment |
| 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.
Who withholds and when
The Saudi payer, whether a company, a permanent establishment or another resident, withholds at the time of payment and remits the tax with a monthly withholding return within the first ten days of the following month. An annual withholding tax return reconciles the year. The payer is liable for tax not withheld, so the burden of proving that a reduced rate applied sits with the payer.
Double tax treaty relief
Saudi Arabia has a wide treaty network, and most treaties cap the rate on dividends, interest and royalties below the domestic rate and exempt service fees that are not attributable to a Saudi permanent establishment. ZATCA permits the reduced treaty rate to be applied at source, but since its January 2025 bulletin the payer must lodge an application through the ZATCA portal — the non-resident's tax residency certificate, ZATCA's treaty-relief request form and the payer's undertaking (Form Q7C) — which ZATCA reviews and approves; the application must be made within five years. Where tax was withheld at the domestic rate, the non-resident can claim a refund of the excess.
The documentation ZATCA accepts has changed more than once. The assistant can show the current guideline and the treaty article for a named partner country.
Permanent establishment risk
Services performed inside the Kingdom for more than the treaty's time threshold can create a permanent establishment, in which case the non-resident becomes taxable on the attributable profit rather than by withholding. Technical service arrangements with on-site staff are the usual pressure point.
Frequently asked questions
- What is the withholding tax rate on services in Saudi Arabia?
- 5% for technical and consulting services, 20% for management fees, and 15% for other services not otherwise listed, unless a treaty provides a lower rate.
- Can the treaty rate be applied at source?
- Yes, on an application to ZATCA with the non-resident's tax residency certificate, ZATCA's request form and the payer's undertaking (Form Q7C). Otherwise the excess is recovered by refund claim.
- When is the WHT return due?
- Monthly, within the first ten days of the month following the payment, plus an annual return.
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.