Saudi Tax Types and Rates

Currently, Saudi Arabia's main taxes include Zakat, corporate income tax, VAT, withholding tax, excise tax, and customs duties.

Saudi Tax Types and Rates

Currently, Saudi Arabia's main taxes include Zakat, corporate income tax, VAT, withholding tax, excise tax, and customs duties.

1. Zakat

Nature: One of the Five Pillars of Islam, a religious obligation.

Rate: 2.5% of net assets.

Zakat is levied on five categories of property: a) grains; b) fruits; c) camels, cattle, sheep, and goats; d) gold and silver; e) movable goods.

Filing: Tax is paid annually after holding the above assets for one year. Currently applies mainly to Saudi-owned companies and other GCC national-owned companies. Joint ventures are taxed proportionally on Zakat and CIT based on shareholding.

2. Corporate Income Tax (CIT)

Standard rate: 20%.

CIT filing:

Tax return must be submitted to ZATCA within 120 days after the fiscal year-end, with tax paid accordingly.

Key points:

① Tax registration must be completed before the end of the first fiscal year.

② Returns must be filed in the prescribed format, including the taxpayer's ID number.

③ Tax must be paid within 120 days after fiscal year-end (60 days for consortium-registered entities); otherwise penalties apply.

④ Taxpayers ceasing operations must notify and file within 60 days of cessation.

⑤ Taxable income exceeding SAR 1 million requires certification by a licensed CPA.

⑥ Tax payable exceeding SAR 500,000 requires three advance payments on the last day of the 6th, 9th, and 12th months of the fiscal year (25% of prior year's tax each). A 1% penalty applies for each 30 days of delay.

3. Personal Income Tax

Saudi Arabia does not levy personal income tax. Neither citizens nor foreign residents are taxed on wages, salaries, or other personal income.

4. VAT

Rate: 15%.

VAT filing: Taxpayers with annual taxable sales exceeding SAR 40 million over the past 12 months file monthly. Others may file quarterly or apply for monthly filing. Monthly filers may apply for quarterly filing after two fiscal years if sales fall below SAR 40 million.

5. Withholding Tax

Deducted by domestic enterprises on payments to non-residents. Rates generally range from 5% to 20%.

WHT filing: Monthly return due within 10 days of the following month, and annual return within 120 days after fiscal year-end. Annual WHT returns are filed together with CIT or Zakat returns. Monthly returns must be filed promptly after payments to non-residents occur.

6. Excise Tax

Tobacco and related products: 100%.

E-cigarettes and vape liquids: 100%.

Energy drinks: 100%.

Carbonated drinks: 50%.

Sugar-sweetened drinks: 50%.

Excise filing: Taxpayers file electronically via ZATCA's online portal. Filing periods are set at 2 months, with tax returns and payment due within 15 days after each period ends.

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