In brief
Imposes income tax on resident companies to the extent of non-Saudi shareholdings, on resident non-Saudi individuals doing business, and on non-residents through a permanent establishment, and governs the tax base, withholding, returns and penalties.
Summary of the law
Key points
- The rate is 20% on the tax base of resident capital companies, resident non-Saudi individuals doing business, and non-residents through a permanent establishment (Article 7).
- Late return: 5% of the unpaid tax for a delay of up to 30 days, 10% up to 90 days and 20% up to 365 days, under Article 76.
Practical tip
- A resident company is taxed on the shares held by non-Saudi partners (Article 2), so review the ownership structure before incorporation. Some articles are amended; see the notes under them.
A plain-language summary prepared by Al-Bayan Al-Wadih Law Firm, focused on the violations and problems that come up most in daily life. It is not a substitute for the official text or for legal advice.
What it covers
- Taxpayers and rate
- Tax base and depreciation
- Withholding tax
- Returns and penalties
Timeline
- Issued: Royal Decree M/1 · 15/1/1425H
- Amendments: Royal Decree M/113 · 2/11/1438H. Amendment to some articles (shown on the law's page at the Bureau of Experts)
- Amendments: Royal Decree M/131 · 29/12/1438H. Amendment to some articles (shown on the law's page at the Bureau of Experts)
- Amendments: Royal Decree M/70 · 11/7/1439H. Amendment to some articles (shown on the law's page at the Bureau of Experts)
- Amendments: Royal Decree M/52 · 28/7/1441H. Amendment to some articles (shown on the law's page at the Bureau of Experts)
Full record of amendments and regulations at the official source
Official text at the Bureau of Experts
The authoritative text is in Arabic; the Bureau of Experts publishes English translations for some laws.
Full official text
The full official text is in Arabic and is reproduced on the Arabic version of this page, as published by the Bureau of Experts at the Council of Ministers. Read the full Arabic text
Library content is simplified general information for awareness only. It is not legal advice and does not replace the official text. Laws change: always check the official source and consult a lawyer before acting. Library data last reviewed: .