Saudi Arabia

Corporate - Tax credits and incentives

Last reviewed - 01 July 2023

Foreign tax credit

Income tax and related fines and penalties paid or payable to Saudi Arabia or to other countries are non-deductible expenses.

Incentives for investment in less-developed regions

The government of Saudi Arabia has granted tax concessions to the following six less-developed regions in Saudi Arabia, with the intention of attracting more investment:

  • Ha’il.
  • Jazan.
  • Najran.
  • Al-Baha.
  • Al-Jouf.
  • Northern territory.

These tax privileges are granted for a period of ten years from the start of any project.

The qualifying investing company’s annual tax bill may be reduced by:

  • Half the annual training expenditure on Saudis.
  • Half the annual salaries paid to Saudis.
  • 15% of the non-Saudi capital share, subject to certain conditions.

More deductions are granted if investment capital for any project exceeds SAR 1 million and if more than five employees of Saudi nationality have jobs of a technical or administrative nature with contracts of at least one year.

Customs incentives

An exemption from customs duties is available on machinery and raw materials that are required for approved projects, provided that they are not available in the local market. Such exemptions should be applied for prior to their importation and are subject to certain terms.