Saudi Arabia

Overview

Last reviewed - 27 June 2020

Saudi Arabia, located in the Middle East between the Arabian Gulf and the Red Sea, is the birthplace of Islam and home to Islam's two holiest shrines, in Makkah and Madinah. The modern Saudi state was founded in 1932 after a 30-year campaign to unify most of the Arabian Peninsula. Saudi Arabia is divided into 13 provinces, with Riyadh as the capital. The official language of Saudi Arabia is Arabic, and the currency is the Saudi riyal (SAR).

The country is a leading producer of oil and natural gas. The government continues to pursue economic reform and diversification, particularly since Saudi Arabia's accession to the World Trade Organization (WTO) in December 2005, and promote foreign investment. A burgeoning population, aquifer depletion, and an economy largely dependent on petroleum output and prices are all ongoing governmental concerns.

Saudi Arabia possesses about 20% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in the Organization of Petroleum Exporting Countries (OPEC). 

In April 2016, Saudi Arabia introduced the Vision 2030 plan to reduce its dependence on oil, diversify the economy, and develop service sectors, such as health, education, infrastructure construction, recreation and tourism, and many more. The sweeping reforms outlined in the Vision 2030 and National Transformation Plan affect vast areas of the government, the economy, and citizens. Tax policy will play a significant role in these reforms as part of the government’s efforts to diversify revenues away from oil and address broader social and economic objectives while maintaining a fertile business environment and continuing to attract foreign direct investment (FDI).

One of the key targets of Vision 2030 is to increase FDI to 5.7% of gross domestic product (GDP) by 2030, from 3.8%. There is a large pool of research demonstrating the positive impact that double taxation treaties (DTTs) can have on FDI flows. Saudi Arabia should consider DTTs as a key way of attracting foreign firms into the Kingdom by offering them the reassurance that income will not be taxed twice. DTTs already prevail over domestic tax rules, and over 50 have been signed with countries including the United Kingdom, China, Switzerland, and Japan. The next step should be to focus on other key trading partners, particularly the United States, but also Germany and Australia.

Furthermore, Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Diversification efforts are focusing on power generation, telecommunications, natural gas exploration, and petrochemical sectors. Roughly 10 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors.

PwC Saudi Arabia supports clients with the local knowledge and skills of its people and with access to a broad range of other professionals across the PwC global network of firms. PwC Saudi Arabia has more than 1,000 professionals offering assurance, tax, and advisory services at several locations.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

20

Corporate income tax (CIT) due dates
CIT return due date

Within 120 days after the taxpayer’s year-end.

CIT final payment due date

Within 120 days after the taxpayer’s year-end.

CIT estimated payment due dates

Three equal advance tax payments are to be made on the last day of the sixth, ninth, and 12th months of the current tax year (based on last year income tax due and specific formula).

Personal income tax (PIT) rates
Headline PIT rate (%)

NA

Personal income tax (PIT) due dates
PIT return due date

NA

PIT final payment due date

NA

PIT estimated payment due dates

NA

Value-added tax (VAT) rates
Standard VAT rate (%)

5

Withholding tax (WHT) rates
WHT rates (%) (Div/Int/Roy)

Resident: NA;

Non-resident: 5 / 5 / 15

Capital gains tax (CGT) rates
Corporate capital gains tax rate (%)

Capital gains are subject to the normal income tax rate applicable to the taxpayer. Non-resident capital gains tax rate is 20%.

Individual capital gains tax rate (%)

NA

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

NA

Inheritance and gift tax rates
Inheritance tax rate (%)

NA

Gift tax rate (%)

NA

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.