Saudi Arabia: New income-tax on foreign companies
Saudi Arabia, Economics, 8/17/2004

Saudi Arabia said that the new income-tax procedure which has been in effect as from July 30th effects only foreign individuals and foreign companies who have activities in the Kingdom.

The ministry of the economy explained that the terms of the new rule are only applicable on non- resident persons, being Saudis or non Saudis who have activities in the Kingdom.

According to the list, Saudis living outside the Kingdom are running trade activities inside it are subjected to the new law.

Member of the Saudi Shoura council who is specialized in economic affairs Ihsan Buhleiqa said that the basic rule says that the Saudi citizens pay Alms ( al-Zakat) and the foreigners pay the tax-income.

He added that if the Saudis have companies registered abroad practicing business activities in the Kingdom then they will have to pay taxes because their companies are foreign.

The law which reduced from 45% to 20% the ceiling of tax rate prescribed on foreign trade activities stated that the tax is not to exceed 85% of the profits of the gas and oil projects. A sector which is almost blocked before foreign investors. However, companies which produce natural gas will be subjected for a tax of 30% over the profits gained during the four years of its operations.

Previous Stories:
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  Saudi Arabia: Shoura Council plan for taxing foreigners   (5/7/2002)

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