Country：沙特阿拉伯 · Tax & Audit
Saudi Arabia · Tax & Audit
Saudi tax is administered by ZATCA. Companies with foreign (non-Saudi/GCC) shareholders pay corporate income tax (CIT) of 20% on profits; Saudi/GCC shareholders pay Zakat of 2.5%. The standard VAT rate is 15%. Withholding tax (WHT) on payments to non-residents is 5%–20% (dividends/interest 5%, royalties 15%, management service fees 20%); the China-Saudi treaty reduces this to dividends 5%, interest/royalties 10%. There is no personal income tax. Foreign capital in the oil/hydrocarbon sector applies higher rates of 50%–85%.
Key points
- CIT: 20% on profits attributable to foreign shareholders; Saudi/GCC shareholders pay Zakat 2.5%.
- VAT: standard 15% (mandatory registration when annual taxable supplies > SAR 375,000).
- WHT: 5%–20% on payments to non-residents; China-Saudi treaty benefits (dividends 5%, interest/royalties 10%).
- RHQ: regional headquarters can enjoy a 15-year corporate income tax exemption.
- No personal income tax, no stamp duty; GCC customs union standard duty 5%.
Procedure
- Register with ZATCA immediately after obtaining the CR (VAT/income tax).
- Maintain Arabic books and annual financial statements.
- Monthly/quarterly VAT filing; annual CIT filing.
- Transfer pricing documentation (related-party transactions).
- Apply for the RHQ tax exemption (where applicable).
Hard requirements
- ZATCA registration; annual filings; audit (at threshold); transfer pricing documentation.
Costs
CIT 20%; VAT 15%; WHT; audit and advisor fees.⏱ ⏱ Timeline：Register immediately after the CR; monthly VAT, annual CIT.⚠ Common risks
- Late ZATCA registration faces fines.
- Unwithheld WHT is collected and penalized.
- Transfer pricing adjusted by ZATCA.
- Oil/hydrocarbon high rates (50%–85%).
Handbook
📘 Step-by-Step Handbook (with owner / timeline / cost / penalties)
Applies to：Tax registration, filing, audit, and ZATCA e-invoicing (Fatoorah) compliance for foreign companies registered in Saudi Arabia.
Prerequisites
- CR issued.
- Tax status determined (foreign shareholding → CIT 20%; Saudi or GCC shareholding → Zakat 2.5%).
- VAT registration required when annual taxable supplies exceed SAR 375,000.
| Step | Action | Owner | Timeline | Cost | Official form / system | Notes & penalties |
|---|---|---|---|---|---|---|
| 1 | ZATCA tax registration. After the CR, complete income tax and VAT registration on the ZATCA portal and obtain the TIN. | ZATCA | Immediately after obtaining the CR | — | Register via the ZATCA portal (CIT/VAT/taxpayer identification number) | — Penalty：Late registration fines |
| 2 | Maintain Arabic books and annual financial statements. Maintain Arabic accounting books and prepare audited annual financial statements (at threshold). | Company/audit | Ongoing | Audit fees | Financial statements (Arabic) | — Penalty：Non-compliant books trigger audits |
| 3 | VAT filing (monthly/quarterly). File and pay VAT monthly or quarterly via ZATCA. | Company | Monthly | VAT 15% | VAT filing via ZATCA | Standard rate 15%. Penalty：Late filing fines |
| 4 | Annual corporate income tax filing. File and pay CIT annually (20% on foreign-shareholding profits). | Company | Per ZATCA window after the fiscal year | CIT 20% | Annual income tax filing | Saudi/GCC shareholders correspond to Zakat 2.5%. Penalty：Late or underpayment fines |
| 5 | Withholding tax (WHT) on payments to non-residents. Before paying non-residents, verify treaty benefits and withhold WHT. | Company | At payment | WHT rates 5%–20% (China-Saudi treaty: dividends 5%, interest/royalties 10%) | WHT filing and payment | — Penalty：Failure to withhold is collected and penalized |
| 6 | ZATCA e-invoicing (Fatoorah) compliance. Integrate the Fatoora platform; B2B real-time clearing, B2C with QR codes reported within 24 hours. | Company and invoicing system | Phase 2 implemented by revenue waves (Wave 24 by 2026-06-30; revenue > SAR 375,000 must integrate) | System integration fees | Fatoora platform integration (B2B real-time clearing, B2C QR codes reported within 24 hours) | Integrate per revenue wave in advance; do not wait for notices. Penalty：Non-compliance fines from SAR 1,000 up to SAR 50,000; uncleared B2B invoices invalid |
| 7 | Transfer pricing documentation. Prepare transfer pricing documentation for related-party transactions. | Company | Ongoing/annual | Advisor fees | TP documentation (related-party transactions) | — Penalty：ZATCA adjustments with additional tax and fines |
| 8 | RHQ tax exemption (where applicable). If establishing a Riyadh RHQ, apply for the corporate income tax exemption (see qualification). | MISA / RHQ | Application period | — | RHQ license and exemption application. | The RHQ exemption term per the latest MISA/RHQ guidance (official statements mostly cite 30 years; some older texts say 15 years, pending verification). Penalty：Cancellation for unmet substance requirements. |
✅ Self-check list
⚠ Common pitfalls
Late ZATCA registration影响：Fines规避：Register immediately after the CR.
Fatoorah e-invoicing not integrated影响：Fines from SAR 1,000 to 50,000; B2B invoices invalid.规避：Integrate ahead per revenue waves.
WHT not withheld影响：Collected and penalized规避：Verify treaty benefits and withholding obligations before payment.
Transfer pricing non-compliance影响：ZATCA additional tax adjustments规避：Prepare transfer pricing documentation.
Confusing CIT and Zakat applicability影响：Wrong or missed payment规避：Split correctly per the shareholding structure.
RHQ 'shell' without substance影响：Exemption revoked规避：Meet economic substance requirements (employees, management, and decisions in Riyadh).
📅 Ongoing post-incorporation obligations
- Monthly VAT filing
- Annual CIT filing and payment
- WHT filing and payment
- Continuous e-invoicing compliance and system maintenance
- Transfer pricing documentation updates
- Audit (at threshold)
- RHQ substance maintenance and annual financial statements to MISA
🔗 Official portals
📎 Source：Zakat, Tax and Customs Authority (ZATCA); new Companies Law; RHQ 15-year tax exemption; China-Saudi tax treaty
Want to turn this into an actionable compliance workflow?
CompliGo · Outbound Compliance Automation
You now have the essentials. Hand it to CompliGo: auto-generate compliance documents, real-time validation, and one-click regulatory alerts. Free trial for new users.
🚀 🚀 Automate compliance with CompliGo📊 📊 VAT engine focuses on the EU — non-EU data is being added (see roadmap)
CompliGo is an independent SaaS operated by the outbound team. This knowledge base only drives acquisition and never handles funds or collects/pays on your behalf.