Tax Rates in Saudi Arabia

Tax Rates in Saudi Arabia

The Tax System in Saudi Arabia

Saudi Arabia primarily has two main types of taxes: Corporate Tax and Value Added Tax (VAT). Additionally, there are local taxes and duties. The tax system is continuously updated in line with the country's economic objectives.

Corporate Tax in Saudi Arabia

The corporate tax rate for companies operating in Saudi Arabia is generally 20%. However, different rates may apply in certain sectors (e.g., oil and gas). There is no distinction in the tax treatment between domestic and foreign companies.

Special Cases
Domestic Companies: The 20% rate also applies to domestic companies.
Petroleum Companies: Companies operating in the oil and natural gas sector may face higher tax rates due to their high profit margins. This rate can go up to 50%.

Value Added Tax (VAT) in Saudi Arabia

Saudi Arabia introduced VAT in 2018 at a rate of 5%. However, this rate was increased to 15% in 2020. VAT is an indirect tax levied on goods and services. VAT is also applied to import transactions.

Income Tax in Saudi Arabia

There is no personal income tax for individuals in Saudi Arabia. This is one of the main reasons why many foreign employees choose to work in the country. However, there are indirect obligations such as certain fees and social security contributions.

Other Taxes and Fees in Saudi Arabia

Real Estate Tax: Property owners are liable to pay an annual real estate tax based on the value of their property.
Import and Export Duties: Import and export duties are applied to specific products. These duties vary on a sectoral basis.

Tax Reductions and Incentives in Saudi Arabia

Saudi Arabia offers various tax reductions and incentives to attract investors. Companies investing in strategic sectors such as technology, agriculture, and renewable energy, in particular, can benefit from special advantages.

Saudi Arabia is a market full of attractive tax rates and incentives for investors. The corporate tax and VAT rates are important factors for companies considering investment. The country's dynamic economic structure and tax policies offer opportunities for both local and foreign entrepreneurs.

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If you are considering setting up a company in Saudi Arabia, you can start your process by contacting World Company Setup.

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