Withholding Tax Rules
Written in plain language for general understanding. This is educational content, not legal advice. Based on Saudi royal decrees, regulations, and ministerial decisions.
Saudi National Law
What is this right?
When Saudi-based companies pay certain amounts to non-residents, they must withhold tax at source:
- Management fees: 20% withholding tax.
- Royalties: 15% withholding tax.
- Rent and technical services: 5% withholding tax.
- Dividends and interest: 5% withholding tax.
- Insurance/reinsurance premiums: 5% withholding tax for non-resident providers.
- Other payments: 15% for any other payments to non-residents for services.
Double taxation treaties may reduce or eliminate withholding tax rates. The paying company must remit the withheld amount to ZATCA within 10 days of the end of the payment month.
When does it apply?
- Your Saudi business is paying a non-resident company or individual for services, royalties, or other payments.
- You are a non-resident receiving income from Saudi Arabia.
What should you do?
- Identify the correct rate based on the type of payment.
- Check for double taxation treaty benefits — the non-resident may qualify for a reduced rate.
- Remit the withheld tax to ZATCA within 10 days of the end of the payment month.
- File the withholding tax return (Form ZATCA WHT) on time.
What should you NOT do?
- Do not pay non-residents without withholding — the Saudi company is liable for the tax even if it was not withheld.
- Do not apply treaty rates without documentation — you need a valid tax residency certificate from the non-resident.
- Do not file late — a 1% penalty per 30 days of delay applies on late withholding tax.
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