Withholding Tax Rules in Saudi Arabia
Reviewed by the Commoner Law Editorial Team. Sourced from Saudi royal decrees, regulations, and ministerial decisions. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
When Saudi-based companies pay certain amounts to non-residents, they must withhold tax at source — this is one of the main ways the Kingdom taxes cross-border transactions:
- 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% for non-resident providers.
- Other payments: 15% for any other payments to non-residents for services.
Saudi Arabia's 60+ double taxation treaties may reduce or eliminate these rates. The paying company must remit withheld amounts to ZATCA within 10 days of the end of the payment month — one of the tightest remittance deadlines in the region.
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 to Do If Your Saudi Business Faces Penalties for Withholding Tax Errors
- Identify the correct withholding rate based on the payment type — the rates range from 5% to 20%.
- Check for double taxation treaty benefits — obtain a valid tax residency certificate from the non-resident before applying reduced rates.
- Remit the withheld tax to ZATCA within 10 days of the end of the payment month through the ZATCA portal.
- File the withholding tax return on time — late filing triggers automatic penalties.
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 from the payment.
- Do not apply treaty rates without documentation — ZATCA requires a valid tax residency certificate from the non-resident's home country.
- Do not miss the 10-day remittance window — a 1% penalty per 30 days of delay applies, and the deadline is stricter than most Gulf countries.
Common Questions
When does it apply — withholding tax rules?
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 I do if ZATCA is penalising my company for withholding tax mistakes on payments to non-residents in Saudi Arabia?
Identify the correct withholding rate based on the payment type — the rates range from 5% to 20%.Check for double taxation treaty benefits — obtain a valid tax residency certificate from the non-resident before applying reduced rates.Remit the withheld tax to ZATCA within 10 days of the end of the payment month through the ZATCA portal.File the withholding tax return on time — late filing triggers automatic penalties.
What should you NOT do — withholding tax rules?
Do not pay non-residents without withholding — the Saudi company is liable for the tax even if it was not withheld from the payment.Do not apply treaty rates without documentation — ZATCA requires a valid tax residency certificate from the non-resident's home country.Do not miss the 10-day remittance window — a 1% penalty per 30 days of delay applies, and the deadline is stricter than most Gulf countries.