Withholding tax

In Saudi Arabia, withholding tax (WHT) applies to non-residents who derive income from Saudi sources by rendering services. WHT rates range from 5 to 20 percent, depending on the nature of the payment, such as royalties, dividends, management fees, and consulting fees.

The WHT framework is continually evolving through regulatory updates and guidance, with increasing clarity around the classification of services into the WHT category and the application of benefits under double tax avoidance agreements (DTAAs). These treaties can significantly reduce or even eliminate tax exposure for eligible non-residents, making strategic planning essential.

The Saudi resident or PE making the payment to the non-resident is responsible for:

• Withholding tax at source
• Remitting the tax to ZATCA
• Filing monthly and annual WHT returns

All filings must meet statutory deadlines and follow prescribed formats, as non-compliance can result in penalties. 

We help clients manage their withholding tax obligations through accurate preparation and timely submission of monthly and annual WHT returns. Beyond compliance, our professionals provide strategic advice on treaty benefits, tax-efficient structuring, and regulatory developments.

Some of the services we offer to our clients include:

• Assessing WHT applicability
• Monthly and annual WHT returns
• Advising on DTAA benefits for WHT
• WHT refund assistance
• WHT health checks
• Support with WHT dispute resolution