Saudi Arabia: Shoura Council plan for taxing foreigners

News reports said that the income tax system proposed to be shortly implemented in Saudi Arabia includes imposing a 12% per year tax on investors and foreign workers recruited in Saudi Arabia -- excluding citizens of the Gulf Cooperation Council -- whose per capita income exceeds three thousand Saudi riyals ( USD 800 per month ).

In its session which was held on Sunday under the chairmanship of Saleh Bin Abdullah Bin Hameed, the Saudi Shoura Council completed discussions of the income tax plan which was proposed by the financial affairs committee at the council.

However, members at the Shoura Council said in press statements that the council approved a proposal of imposing a tax of 10% of the annual income of each investor and foreign worker in Saudi Arabia exceeding 3000 Saudi riyals. This system will exclude the citizens of the Gulf Cooperation Council GCC and the Saudis who instead fall under the "al-Zakat system" ( 2.5% per year donation pay rate). This law will be also applied on the profits of the foreign investment companies and not on their capital.

In a statement to the Saudi New Agency, the council's secretary general Hammoud al-Bader said that the council discussed articles 62 through 75 which all deal with improving taxation and the consequences of not paying taxes and also duties and responsibilities of each side including fines on those who did not pay tax in due time.

After preparing the final formula of the new income tax system in Saudi Arabia by the financial affairs committee at the Saudi Shoura council, it will be sent back to the council for voting and then to the Saudi Cabinet for approval.