Withholding Tax on Payments Abroad — and Getting Treaty Relief
For Saudi companies that pay foreign suppliers, licensors, lenders or parent companies: we classify each payment, file the monthly and annual returns, and prepare the treaty-relief file so a lower treaty rate is applied the way ZATCA requires.
The short answer
When a Saudi resident (or a non-resident’s permanent establishment in the Kingdom) pays a non-resident from a Saudi source, the payer withholds tax — 5% on technical and consulting services, 15% on royalties, 20% on management fees — and files and pays within the first 10 days of the following month. Treaty rates are not automatic: they apply only through ZATCA’s at-source or refund procedure.
Who this is for
- Saudi companies paying foreign consultants, engineers, software vendors or licensors
- Subsidiaries paying management fees, royalties, interest or dividends to a foreign parent
- Companies paying foreign carriers, insurers or equipment lessors
- Finance teams that applied a treaty rate without completing ZATCA’s procedure, or never claimed relief they were owed
How we help
- 1.Classifying each foreign payment: service, royalty, software, freight, goods or mixed contract
- 2.Monthly withholding tax returns, payee certificates and the annual return
- 3.Treaty relief files: tax residency certificate, ZATCA’s approved forms and authentication
- 4.Refund claims for tax withheld at the domestic rate, within the 5-year window
- 5.A look-back review of past payments and the payer’s exposure
Key facts
Technical and consulting services: 5%, even if performed entirely abroad.
Source:Income Tax IR Art. 63(1) and 63(3) as amended by MD 25 dated 8/1/1445H [T02-0603]Royalties 15%; management fees 20%; other services from a Saudi source 15%.
Source:Income Tax Law Art. 68 [T02-0602]Income Tax Law Art. 68 [T02-0601]Income Tax Law Art. 68 (other payments up to 15%) [T02-0610]Rent, dividends, loan returns, insurance premiums, international telecom, air tickets and freight: 5%.
Source:Income Tax Law Art. 68 [T02-0605]Income Tax IR Art. 63(1) and 63(6) [T02-0607]Income Tax IR Art. 63(1) [T02-0608]Income Tax IR Art. 63(1) [T02-0609]Income Tax IR Art. 63(1) and 63(5) as amended by MD 484 dated 15/4/1444H [T02-0604]Income Tax Law Art. 68 [T02-0606]Withheld on the full amount paid, with no deduction for the payee’s costs.
Source:Income Tax IR Art. 63(8) [T02-0611]Monthly return and payment within 10 days; annual return within 120 days of year end.
Source:Income Tax Law Art. 68 [T02-0612]IR Art 63(9) [T11-0404]Late payment: 1% of the unpaid tax for each 30 days, borne by the payer.
Source:Income Tax IR Art. 68(1)(e) and 68(2) [T02-0615]Income Tax IR Art. 68(1)(e) and Art. 69 (AR ed. to MD 25) [T02-0919]Treaty relief claims are subject to a 5-year limitation.
Source:Circular s.4.2.2.2 citing Implementing Regulations Art 66 [T11-0403]
Rates under Saudi domestic law
Management fees (e.g. hotel or ship management contracts): 20%.
Source:Income Tax Law Art. 68 [T02-0601]Royalties: 15%. Any other payment for services from a Saudi source not listed elsewhere: 15%.
Source:Income Tax Law Art. 68 [T02-0602]Income Tax Law Art. 68 (other payments up to 15%) [T02-0610]Technical or consulting services, studies, research, surveys, supervision and engineering including drawings: 5%, related or third party, wherever performed.
Source:Income Tax IR Art. 63(1) and 63(3) as amended by MD 25 dated 8/1/1445H [T02-0603]Rent (including leases of movables located in the Kingdom), dividends, loan returns, insurance and reinsurance premiums: 5%.
Source:Income Tax Law Art. 68 [T02-0605]Income Tax IR Art. 63(1) and 63(6) [T02-0607]Income Tax IR Art. 63(1) [T02-0608]Income Tax IR Art. 63(1) [T02-0609]International telecom 5% — but payments to foreign operators for carrying, routing or terminating international calls and for roaming are not subject to WHT.
Source:Income Tax IR Art. 63(1) and 63(5) as amended by MD 484 dated 15/4/1444H [T02-0604]Air tickets departing the Kingdom and air or sea freight: 5%. Carrying goods from abroad to Saudi ports is outside this category.
Source:Income Tax Law Art. 68 [T02-0606]
Getting the treaty rate
Two routes, chosen by the Saudi payer: apply the treaty rate at source after filing a request on the ZATCA portal, or withhold at the domestic rate and claim the excess back.
Source:ZATCA Tax Circular 'Implementation of WHT under DTAs' v1 Jan 2025, s.4.1-4.2 [T11-0400]At source: tax residency certificate, ZATCA’s approved treaty form certified by the other State, authentication by the Saudi embassy or an Apostille, and the payer’s undertaking.
Source:Circular s.4.2.2.1-4.2.2.2 [T11-0401] official text ↗Refund: the same certificate and form, the payee’s authorisation, the WHT return and payment receipt, and a Chamber-attested letter confirming the amount was never refunded or set off.
Source:Circular s.4.2.3.1-4.2.3.2 [T11-0402]A treaty only limits Saudi tax. Where its cap is higher than the domestic rate, the domestic rate applies and no treaty filing is needed for that item.
Source:Circular s.3.2.2 (DTAs take precedence to give relief) [T11-0407]
Treaty withholding rates by country
Headline rates under each treaty, read from the treaty rows. Where a treaty cap is higher than the Saudi domestic rate, the domestic rate applies (marked). Holding-size, beneficial-owner and procedure conditions apply — the rate is only available through ZATCA’s at-source or refund route.
| Country | In force | Dividends | Interest | Royalties | Row |
|---|---|---|---|---|---|
| Algeria | 2016-03-01 | 0% | 0% | 7% | T11-0121 ↗ |
| Austria | 2007-06-01 | 5% | 5% | 10% | T11-0122 ↗ |
| Azerbaijan | 2015-05-01 | 5% / 7% (conditions apply) | 5% (domestic; cap 7%) | 10% | T11-0123 ↗ |
| Bangladesh | 2011-10-01 | 5% (domestic; cap 10%) | 5% (domestic; cap 7.5%) | 10% | T11-0124 ↗ |
| Belarus | 2010-08-01 | 5% | 5% | 10% | T11-0125 ↗ |
| Bulgaria | 2019-01-01 | 5% | 5% | 5% equipment / 10% other | T11-0126 ↗ |
| China | 2006-10-01 | 5% | 5% (domestic; cap 10%) | 10% | T11-0101 |
| Cyprus | 2019-03-01 | 5% (conditions apply) | 0% | 5% equipment / 8% other | T11-0127 ↗ |
| Czech Republic | 2013-05-01 | 5% | 0% | 10% | T11-0128 ↗ |
| Egypt | 2017-07-01 | 5% (conditions apply) | 5% (domestic; cap 10%) | 10% (conditions apply) | T11-0103 |
| Ethiopia | 2016-10-01 | 5% | 5% | 7.5% | T11-0129 ↗ |
| Georgia | 2019-04-01 | 5% | 5% | 5% equipment / 8% other | T11-0131 ↗ |
| Germany | No comprehensive treaty — domestic rates apply | T11-0115 | |||
| Greece | 2010-05-01 | 5% | 5% | 10% | T11-0132 ↗ |
| Hong Kong SAR | 2018-09-01 | 5% | 0% | 5% equipment / 8% other | T11-0117 |
| Hungary | 2015-05-01 | 5% | 0% | 5% equipment / 8% other | T11-0133 ↗ |
| India | 2006-11-01 | 5% | 5% (domestic; cap 10%) | 10% | T11-0102 |
| Ireland | 2012-12-01 | 5% (conditions apply) | 0% | 5% equipment / 8% other | T11-0134 ↗ |
| Italy | 2009-12-01 | 5% (conditions apply) | 5% | 10% | T11-0109 |
| Japan | 2011-09-01 | 5% (conditions apply) | 5% (domestic; cap 10%) | 5% equipment / 10% other | T11-0112 |
| Jordan | 2017-09-01 | 5% | 5% | 7% | T11-0114 ↗ |
| Kazakhstan | 2016-09-01 | 5% | 5% (domestic; cap 10%) | 10% | T11-0135 ↗ |
| Korea | 2008-12-01 | 5% (conditions apply) | 5% | 5% equipment / 10% other | T11-0113 |
| Kosovo | 2020-08-01 | 5% | 5% | 5% equipment / 10% other | T11-0136 ↗ |
| Kuwait | 2025-08-01 | 5% | 0% | 10% | T11-0118 |
| Kyrgyzstan | 2015-10-01 | 0% | 0% | 7.5% | T11-0137 ↗ |
| Latvia | 2021-07-01 | 5% (conditions apply) | 5% | 5% equipment / 7% other | T11-0138 ↗ |
| Luxembourg | 2014-09-01 | 5% | 0% | 5% equipment / 7% other | T11-0139 ↗ |
| Malaysia | 2007-07-01 | 5% | 5% | 8% | T11-0140 ↗ |
| Malta | 2012-12-01 | 5% | 0% | 5% equipment / 7% other | T11-0141 ↗ |
| Mauritania | 2025-01-01 | 5% | 0% | 7% | T11-0142 ↗ |
| Mexico | 2018-03-01 | 5% | 5% / 10% (conditions apply) | 10% | T11-0143 ↗ |
| Netherlands | 2010-12-01 | 5% (conditions apply) | 5% | 7% | T11-0110 |
| North Macedonia | 2016-05-01 | 5% | 5% | 10% | T11-0145 ↗ |
| Pakistan | 2006-12-01 | 5% (conditions apply) | 5% (domestic; cap 10%) | 10% | T11-0107 |
| Poland | 2012-06-01 | 5% | 5% | 10% | T11-0146 ↗ |
| Portugal | 2016-09-01 | 5% / 10% (conditions apply) | 5% (domestic; cap 10%) | 8% | T11-0147 ↗ |
| Romania | 2012-07-01 | 5% | 5% | 10% | T11-0148 ↗ |
| Russia | 2010-02-01 | 5% | 5% | 10% | T11-0149 ↗ |
| Singapore | 2011-07-01 | 5% | 5% | 8% | T11-0111 |
| Slovakia | 2024-08-01 | 5% | 5% (domestic; cap 10%) | 10% | T11-0150 ↗ |
| South Africa | 2008-05-01 | 5% / 10% (conditions apply) | 5% | 10% | T11-0151 ↗ |
| Spain | 2008-10-01 | 5% (conditions apply) | 5% | 8% | T11-0152 ↗ |
| Sweden | 2016-08-31 | 5% / 10% (conditions apply) | 0% | 5% equipment / 7% other | T11-0153 ↗ |
| Syria | 2010-10-01 | 0% | 5% (domestic; cap 7.5%) | 15% | T11-0155 ↗ |
| Tajikistan | 2015-06-01 | 5% / 10% (conditions apply) | 5% (domestic; cap 8%) | 8% | T11-0156 ↗ |
| Tunisia | 2013-01-15 | 5% | 2.5% / 5% (conditions apply) | 5% | T11-0157 ↗ |
| Turkey | 2009-04-01 | 5% (conditions apply) | 5% (domestic; cap 10%) | 10% | T11-0106 |
| Turkmenistan | 2017-04-01 | 5% (domestic; cap 10%) | 5% (domestic; cap 10%) | 10% | T11-0158 ↗ |
| Ukraine | 2012-12-01 | 5% / 15% (conditions apply) | 5% (domestic; cap 10%) | 10% | T11-0159 ↗ |
| United Arab Emirates | 2019-04-01 | 5% | 0% | 10% | T11-0105 |
| United Kingdom | 2009-01-01 | 5% (conditions apply) | 0% | 5% equipment / 8% other | T11-0104 |
| United States | No comprehensive treaty — domestic rates apply | T11-0116 | |||
| Uzbekistan | 2010-11-01 | 5% (domestic; cap 7%) | 5% (domestic; cap 7%) | 10% | T11-0160 ↗ |
| Venezuela | 2016-12-01 | 5% | 5% | 8% | T11-0161 ↗ |
| Vietnam | 2011-02-01 | 5% / 12.5% (conditions apply) | 5% (domestic; cap 10%) | 7.5% / 10% (conditions apply) | T11-0162 ↗ |
Frequently asked questions
When does Saudi withholding tax apply?
When a resident (or a non-resident’s permanent establishment) in the Kingdom pays a non-resident an amount from a source in the Kingdom. The payer withholds and remits; government bodies are also withholding persons. Payments between two residents carry no WHT.
What WHT rate applies to technical or consulting services?
5%, whether the provider is related or not, and wherever the service is performed — even entirely abroad. It covers technical, scientific and consulting services, studies, research, surveys, supervision and engineering including drawings.
What are the other main rates?
Management fees 20%; royalties 15%; rent, dividends, loan returns, insurance premiums and international telecom 5%; other services from a Saudi source 15%.
Is WHT calculated on the gross amount?
Yes. It is charged on the full amount paid to the non-resident, with no deduction for its costs, whether or not the payment is deductible for the payer.
When is WHT filed and paid?
The monthly return and payment are due within the first 10 days of the month after the payment. The payer also gives the payee a certificate of tax withheld and files an annual WHT return within 120 days of year end.
Who bears the fines for late WHT?
The withholding person, not the payee: a delay fine of 1% of the unpaid tax for each 30 days, and a 25% fine where information is hidden or false.
Does freight paid abroad attract WHT?
Air or sea freight and international tickets departing the Kingdom attract 5%. Carrying goods from abroad to Saudi ports is outside this category. An onward leg abroad is in scope only where the carrier is committed to deliver to the final place as one continuous operation.
Is a contract to supply goods into Saudi Arabia subject to WHT?
A pure supply of goods, including the shipping and insurance for it, is outside WHT. Incidental work performed in the Kingdom — inland transport, installation, maintenance or training — is Saudi-source, and mixed contracts must be split.
How are software and SaaS payments treated?
Under ZATCA’s January 2024 software guideline, a non-exclusive right to access and use standard software (or customised software for the payer’s own business) is commercial profits, not a royalty. If the user may modify the software it is a royalty (15%). Development for a fee with full copyright passing to the payer is a technical service (5%).
What about online database subscriptions?
Public content is “other income” at 15%; private or confidential data is a royalty at 15%; mixed public and confidential content is a royalty.
Is equipment hire from a non-resident a royalty?
No. ZATCA’s WHT guideline lists hire of industrial, commercial or scientific equipment among payments that are not royalties. Rent paid to a non-resident, including leases of movables located in the Kingdom, carries 5%.
Is treaty relief automatic?
No. The Saudi payer either applies the treaty rate at source after filing a request on the ZATCA portal, or withholds the full domestic rate and claims the excess back.
What documents does the at-source route need?
A tax residency certificate from the foreign tax authority; ZATCA’s approved treaty form certified by that authority; authentication by the Saudi embassy or an Apostille; and the payer’s undertaking on Form Q/7C.
What does a refund claim need?
The residency certificate and treaty form (authenticated), a letter from the payee authorising the Saudi payer to receive the refund, the WHT return and payment receipt, and a Chamber-attested letter from the payer confirming the amount was never refunded, transferred or set off.
Is there a time limit for treaty claims?
Yes. Applications at source or for a refund, and ZATCA’s audit of them, are subject to a 5-year limitation. After it lapses the treaty benefit can no longer be claimed.
The treaty cap is higher than the Saudi rate. Which applies?
The lower one. A treaty only limits Saudi tax; where the domestic rate is already lower (for example 5% interest against a 10% cap), the domestic rate applies with no treaty filing needed for that item.
Can any company in a treaty country claim the treaty rate?
Treaty rates on dividends, interest and royalties apply only if the recipient is the beneficial owner; a conduit that passes the income on is taxed at domestic rates. Saudi Arabia has also adopted the MLI principal purpose test, which denies a benefit obtained mainly for that purpose.
Do Germany and the USA have tax treaties with Saudi Arabia?
Neither has a comprehensive income tax treaty with the Kingdom, so domestic WHT applies in full (5% technical, dividends and interest; 15% royalties and other services; 20% management fees) with no refund route.
What changed with the Saudi–Kuwait treaty?
It entered into force on 1 August 2025 and applies to WHT from 1 January 2026: dividends 5%, interest 0%, royalties 10%, with a separate article for technical, managerial and consultancy fees.
What if we applied a treaty rate without completing the procedure?
The Saudi payer is exposed: the undertaking makes it settle tax and penalties arising from false information, arithmetic errors or misreading the treaty, and late payment of the shortfall attracts the 1%-per-30-days fine.
General information only, not tax or legal advice. Laws change; check the official Arabic text or speak to a qualified adviser before acting.
Rules cited on this page
Each statement above names the library row it comes from. The law and article, the date the row was last verified against the official source, and a link to the official text where one is held are listed here.
| Row | Law / article | Verified on | Official text |
|---|---|---|---|
| T02-0600 | Income Tax Law Art. 68; Income Tax IR Art. 63(1); WHT DTA Circular (Jan 2025) paras 2.2 and 3.1 | 2026-10-04 | — |
| T02-0601 | Income Tax Law Art. 68; Income Tax IR Art. 63(1)-(2) | 2026-10-04 | — |
| T02-0602 | Income Tax Law Art. 68; Income Tax IR Art. 63(1) | 2026-10-04 | — |
| T02-0603 | Income Tax IR Art. 63(1) and 63(3) as amended by MD 25 dated 8/1/1445H; DTA Circular para 3.1.5 note 2 | 2026-10-04 | — |
| T02-0604 | Income Tax IR Art. 63(1) and 63(5) as amended by MD 484 dated 15/4/1444H | 2026-10-04 | — |
| T02-0605 | Income Tax Law Art. 68; Income Tax IR Art. 63(1); DTA Circular para 3.1.5 | 2026-10-04 | — |
| T02-0606 | Income Tax Law Art. 68; Income Tax IR Art. 63(1) and 63(4) as amended by MD 1709/185 dated 23/7/1426H | 2026-10-04 | — |
| T02-0607 | Income Tax IR Art. 63(1) and 63(6) | 2026-10-04 | — |
| T02-0608 | Income Tax IR Art. 63(1) | 2026-10-04 | — |
| T02-0609 | Income Tax IR Art. 63(1) | 2026-10-04 | — |
| T02-0610 | Income Tax Law Art. 68 (other payments up to 15%); Income Tax IR Art. 63(1) and 63(7) | 2026-10-04 | — |
| T02-0611 | Income Tax IR Art. 63(8) | 2026-10-04 | — |
| T02-0612 | Income Tax Law Art. 68; Income Tax IR Art. 63(9)(a) | 2026-10-04 | — |
| T02-0615 | Income Tax IR Art. 68(1)(e) and 68(2) | 2026-10-04 | — |
| T02-0910 | ZATCA software guideline s.1.1-1.4 | 2026-10-05 | official text ↗ |
| T02-0911 | ZATCA software guideline (Jan 2024) s.3.3.11, Examples 11.1-11.3, tax treatment p.48; Appendix p.52 | 2026-10-05 | — |
| T02-0912 | ZATCA software guideline s.3.3.7, Examples 7.1-7.3, p.33 | 2026-10-05 | — |
| T02-0913 | ZATCA software guideline s.3.3.8, Example 8, tax treatment p.35 | 2026-10-05 | — |
| T02-0916 | General Guideline for Withholding Tax (AR, May 2026) classification table, printed p.40 | 2026-10-05 | — |
| T02-0917 | General Guideline for Withholding Tax (AR, May 2026) Example (13), printed p.31; Income Tax Law Art. 5(a)(8) | 2026-10-05 | — |
| T02-0918 | Income Tax IR Art. 5(7) (AR ed. to MD 25, 1445H); General WHT Guideline (AR, May 2026) items (6)-(7), printed p.30 | 2026-10-05 | — |
| T02-0919 | Income Tax IR Art. 68(1)(e) and Art. 69 (AR ed. to MD 25); Income Tax Law Arts. 68, 77(b); General WHT Guideline (AR, May 2026) section on fines | 2026-10-05 | — |
| T11-0118 | Saudi Arabia–Kuwait double tax treaty | 2026-10-05 | — |
| T11-0400 | ZATCA Tax Circular 'Implementation of WHT under DTAs' v1 Jan 2025, s.4.1-4.2 | 2026-10-05 | — |
| T11-0401 | Circular s.4.2.2.1-4.2.2.2; ZATCA e-service 'DTAAs Application' (eServices-219, not re-read 5 Oct 2026); no fee | 2026-10-05 | official text ↗ |
| T11-0402 | Circular s.4.2.3.1-4.2.3.2 | 2026-10-05 | — |
| T11-0403 | Circular s.4.2.2.2 citing Implementing Regulations Art 66 | 2026-10-05 | — |
| T11-0404 | IR Art 63(9); IR Art 68(1)(e); ZATCA General WHT Guideline (AR, May 2026) s.5 | 2026-10-05 | — |
| T11-0405 | Circular s.3.2.8-3.2.11; treaty Arts 10-12 | 2026-10-05 | — |
| T11-0406 | MLI Art 7(1); ZATCA 'MLI Convention' note (Jul 2020) s.3-4; KSA MLI position Art 2 list | 2026-10-05 | — |
| T11-0407 | Circular s.3.2.2 (DTAs take precedence to give relief); IR Art 63(1) rates | 2026-10-05 | — |
| T11-0412 | ZATCA General WHT Guideline (AR, May 2026) WHT decision tree | 2026-10-05 | — |
| T11-0418 | BMF DBA status list 1 Jan 2026; IRS treaty A-Z list (checked 5 Oct 2026); Income Tax Law Art 68; IR Art 63 | 2026-10-05 | — |
| T11-0419 | Circular s.4.2.2.1; IR Art 68(1)(e) | 2026-10-05 | — |
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