Tax Rates in Saudi Arabia
for Expats 2026

No Personal Income Tax on Employment — flat rate 0%

No personal income tax. 20% CIT for foreign companies on Saudi-source income (withholding approach). Zakat (2.5% of business equity) applies to Saudi/GCC shareholders instead of CIT.

Eligibility: All employed residents

Source: Saudi Income Tax Law 2004

SILZ — 0% CIT for Qualifying Entities — flat rate 0%

0% CIT for 50 years + customs duty suspension. Full foreign ownership. Located near KAIA airport, Riyadh.

Eligibility: Qualifying logistics and light manufacturing companies

Source: Royal Decree M/22 (2021)

Personal Income Tax — Zero Rate Explained

Saudi Arabia is one of the world's few countries with zero personal income tax for all residents and non-residents. This applies regardless of income source — salary, business profits, investment returns, or rental income generated within or outside the Kingdom are not subject to personal income tax. Expat workers employed by Saudi or foreign companies in Saudi Arabia pay no income tax on their earned wages. This unique fiscal environment has made the Kingdom increasingly attractive to high-net-worth individuals and specialized professionals seeking tax-efficient employment.

However, the absence of personal income tax does not mean Saudi Arabia is tax-free. Corporations, VAT, and sector-specific fees fund government revenue. Additionally, expatriates must hold valid visa sponsorship (Kafala system or conditional sponsorship post-Vision 2030 reforms) and comply with labor law requirements.

Corporate Tax — 20% Standard Rate

Foreign companies and entities operating in Saudi Arabia are subject to corporate income tax at a flat rate of 20% on net profits. This rate applies uniformly across most sectors. However, Special Economic Zones (such as NEOM and Saudi Aramco's ecosystem) offer reduced corporate tax rates and incentives for foreign direct investment. Saudi-owned companies are subject to both corporate tax and the separate 2.5% Zakat (Islamic wealth tax), making their combined burden higher. Foreign corporations receive no dividend withholding tax treatment — dividends distributed to non-resident shareholders face no additional tax at distribution.

Key deductions available to foreign corporations include operating expenses, depreciation, R&D investments, and business-related capital expenditures. The tax year in Saudi Arabia aligns with the Gregorian calendar (January–December).

VAT — 15% Standard Rate

Saudi Arabia's Value Added Tax (VAT) at 15% is one of the highest standard rates globally and applies to most goods and services supplied within the Kingdom. The rate was increased from 5% to 15% in July 2020 as part of Vision 2030 fiscal consolidation. Certain categories qualify for zero-rated treatment (exports, healthcare, and select food items), while others are exempt (financial services, insurance, and residential accommodation). Businesses with annual turnover exceeding approximately 375,000 SAR ($100,000 USD) must register for VAT and file monthly returns with GAZT.

For expats, VAT is embedded in the cost of living — groceries, dining, utilities, fuel, and imported goods all carry the 15% tax. This represents a meaningful cost-of-living factor when evaluating compensation packages. Expats should budget VAT into discretionary spending, particularly on electronics and Western imported products.

Capital Gains Tax

Individuals in Saudi Arabia are not subject to capital gains tax on any gains realized from the sale of assets — whether real estate, equities, business interests, or cryptocurrency. This zero rate applies to both Saudi nationals and foreign residents. Foreign corporations, conversely, are subject to the standard 20% corporate tax rate on capital gains derived from Saudi sources. This creates a favorable environment for individual investors but requires corporate entities to account for capital gains as ordinary business income.