# Saudi Zakat, Corporate Income Tax & WHT

> In Saudi Arabia, the share of a company owned by Saudi and GCC nationals pays zakat, generally 2.5% of the zakat base, while the share owned by foreigners pays corporate income tax at 20% of taxable profit. Annual zakat and tax returns are due within 120 days of the year-end. Payments to non-residents — for services, royalties, management fees and others — attract withholding tax at rates set by type.

Practice: Saudi Arabia Business Services — https://www.industax.com/services/saudi-business/

Mixed-ownership companies file a combined return splitting the base between zakat and tax. Transfer pricing rules apply to related-party dealings, including with an Indian parent.

We prepare filings with partner Saudi advisers and coordinate credits in India.

## Key facts

| Item | Detail |
| --- | --- |
| Zakat | Saudi/GCC-owned share, generally 2.5% of base |
| Income tax | 20% on foreign-owned share |
| Return due | Within 120 days of year-end |
| Withholding | On payments to non-residents, rates by type |

## Who needs this

- Saudi companies with foreign shareholders
- Branches of foreign companies
- Companies paying overseas vendors

## What's included

- Return preparation via partners
- Withholding compliance
- Transfer pricing coordination

## Documents

- Audited financial statements
- Shareholding details
- Payments to non-residents

## Process

1. **Compute** — Zakat base and taxable profit.
2. **File** — Return within 120 days.
3. **Withhold** — Monthly WHT on foreign payments.

Work that legally requires a licensed local adviser is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Does a 100% foreign-owned company pay zakat?

No, it pays corporate income tax at 20% on its profits instead.

### Are audited accounts required?

Companies generally submit audited financial statements with their returns.

### Is Saudi tax creditable in India?

Tax paid in Saudi Arabia can be credited in India under the India–Saudi Arabia treaty, subject to conditions.

## Official sources

- ZATCA — Zakat, Tax and Customs Authority: https://zatca.gov.sa/

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Canonical page: https://www.industax.com/services/saudi-business/saudi-zakat-corporate-tax
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.