ZATCA Income Tax Brackets in Saudi Arabia for 2024

One of the largest G20 countries, Saudi Arabia is ranked fifth in terms of GDP per capita among the G20 countries. It also ranks highly for governance (sixth), digital skills (ninth) and for a future workforce (13th). Armed with an ambitious reform agenda, Saudi Arabia is strategically located, and offers a young and skilled workforce and many game-changing opportunities for investment. End-to-end support and service facilitation for investors include a strategic investor program, startup Saudi, and business visas for visiting investors.

The tax system in Saudi Arabia has evolved to include several forms of tax including income tax, Zakat, withholding tax, value-added tax, excise tax and real estate transaction tax (RETT). 

The tax system is administered by the official tax body, Zakat, Tax and Customs Authority (ZATCA). The Income Tax Law and Regulations provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with the tax laws of Saudi Arabia.

Here you will learn more about:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates
• Zakat rates
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• value-added tax (VAT) rates

Headline Tax Rates in Saudi Arabia

Personal Income Tax (PIT) for Individuals in Saudi Arabia for 2024

Saudi Arabia does not impose income tax on an individual’s earnings derived from employment. Non-employment income derived by resident individuals is taxed under corporate income tax (CIT). 

Non-resident individuals with no permanent establishment (PE) who derive income from a source in Saudi Arabia are taxed under the withholding tax (WHT) regulations. 

Corporate Income Tax Rates (CIT) in Saudi Arabia for 2024

The Corporate Income Tax (CIT) rates applicable in Saudi Arabia are summarized below.

Corporate Income Tax Due Dates

Zakat

Zakat is a term that refers to a form of almsgiving. Zakat is considered a form of worship and represents one of the Five Pillars of Islam. It is mandatory for an individual to donate a certain proportion of their wealth each year to charitable causes. ZATCA sets out the rules for how zakat on financing activities is calculated.

There are seven rules applicable. The Fifth Rule identifies that Zakat is calculated by 2.5% out of the Zakat base. The calculation of the Zakat base is set out in the Third Rule as the following equation:

Zakat shall not apply to a short financial period, that is, it must exceed 354 days and the Zakat shall not be less than SAR$500 per Zakat payer.

Capital Gains Tax (CGT) in Saudi Arabia

Capital Gains Tax (CGT) rates as they apply to taxpayers in Saudi Arabia are summarized below.

Withholding Tax Rates for Residents and Non-Residents in Saudi Arabia

In general, withholding tax (WHT) is levied on residents and non-residents in Saudi Arabia. Payments must be made within the first 10 days of the month following the month in which payment was received. WHT rates vary depending on the source of income and the rates applicable to dividends, interest and royalties are tabulated below.

Further, Saudi Arabia has entered into double taxation treaties (DTTs) with several countries, which may affect WHT rates. A taxpayer may benefit from the provisions of these DTTs.

Value-Added Tax Rates in Saudi Arabia

The current Value-Added Tax (VAT) rate in Saudi Arabia is 15%.