Saudi Arabia business tax and compliance rates (2026)
The headline Saudi tax rates, thresholds and deadlines in one place: VAT, corporate income tax, zakat, withholding tax, e-invoicing waves, transfer pricing and the RHQ program. A reference for founders and finance teams in Saudi Arabia.
The headline rates, thresholds and deadlines for running a company in Saudi Arabia, in one place. Figures are current for 2026. Confirm against ZATCA and MISA before you file, because thresholds and waves move.
Tax rates at a glance
| Tax | Rate | Applies to |
|---|---|---|
| VAT | 15% | Most goods and services |
| Corporate income tax | 20% | Non-GCC foreign-owned share of profit |
| Zakat | 2.5% | Saudi and GCC-owned share, of the zakat base |
| Withholding tax | 5% to 20% | Payments to non-residents |
| Real Estate Transaction Tax | 5% | Property transfers |
Withholding tax by payment type
| Payment to a non-resident | Rate |
|---|---|
| Dividends | 5% |
| Interest or loan charges | 5% |
| Rent | 5% |
| Technical or consulting services | 5% |
| Insurance or reinsurance premiums | 5% |
| Royalties | 15% |
| Management fees to a head office or related party | 20% |
| Other services | 15% |
Rates apply to the gross payment, and tax treaties can reduce them. More on withholding tax.
VAT thresholds and filing
| Item | Figure |
|---|---|
| Standard rate | 15% |
| Mandatory registration | SAR 375,000 taxable sales over 12 months |
| Voluntary registration | SAR 187,500 |
| Monthly filing | Turnover above SAR 40 million |
| Quarterly filing | Turnover at or below SAR 40 million |
| Return due | Last day of the month after the period |
| Late registration penalty | From SAR 10,000 |
E-invoicing (ZATCA Fatoora)
| Item | Detail |
|---|---|
| Phase 1, generation | Since December 2021 |
| Phase 2, integration | Rolled out in waves, largest revenue first |
| Wave 25 scope | Revenue above SAR 187,500 in any year 2022 to 2025 |
| Wave 25 deadline | Integrate by 1 February 2027 |
| Penalty waiver | Ended mid-2026, enforcement now live |
Zakat and corporate tax split
| Ownership | Regime | Rate |
|---|---|---|
| Saudi and GCC nationals | Zakat | 2.5% of the zakat base |
| Non-GCC foreign | Corporate income tax | 20% of adjusted profit |
| Mixed ownership | Both, split by ownership | 2.5% and 20% |
More on zakat versus corporate tax.
Transfer pricing
| Item | Figure |
|---|---|
| Arm's length rule | All related-party, controlled, transactions |
| Disclosure form | Every taxpayer with related-party transactions, filed with the return |
| Master and Local file | Controlled transactions above SAR 6 million, income-tax payers |
| Zakat payers | Being phased in by size |
| Country-by-country report | Group revenue above SAR 3.2 billion |
| File production | Within about 30 days of a ZATCA request |
Regional Headquarters (RHQ)
| Item | Detail |
|---|---|
| Corporate income tax | 0% for 30 years, approved activities |
| Withholding tax | 0% for 30 years, approved activities |
| Saudization | 10-year exemption |
| Government contract rule | RHQ required for contracts above SAR 1 million, since January 2024 |
| Staffing | 15 employees including 3 at C-level in year one |
Setup and ownership
| Item | Detail |
|---|---|
| Foreign ownership | 100% in most sectors, via a MISA license |
| Trading license capital | SAR 30 million minimum |
| MISA license time | About 1 to 2 weeks |
| Full setup time | About 10 to 12 weeks to fully operational |
More on setting up a foreign company.
Government portals you will run
Nafath for identity, Absher for Ministry of Interior services, Muqeem for residency, Qiwa for labor and Saudization, Mudad for payroll and the Wage Protection System, GOSI for social insurance, and ZATCA for tax and e-invoicing. How the portals connect.
A reference summary, not tax or legal advice. Confirm current figures with ZATCA and MISA before filing.
Questions
What is the VAT rate in Saudi Arabia?
The standard VAT rate in Saudi Arabia is 15%, in force since 1 July 2020. Registration is mandatory above SAR 375,000 of taxable sales over twelve months.
What is the corporate income tax rate in Saudi Arabia?
Corporate income tax is 20%, charged on the share of profit owned by non-GCC foreign investors. The Saudi and GCC-owned share pays zakat at 2.5% instead.
What are the withholding tax rates in Saudi Arabia?
Withholding tax on payments to non-residents runs from 5% to 20%: 5% on dividends, interest, rent and technical services, 15% on royalties, and 20% on management fees. Tax treaties can reduce these rates.
Who must comply with ZATCA e-invoicing in Saudi Arabia?
ZATCA Phase 2 e-invoicing is rolled out in waves by revenue. Wave 25 covers businesses with VAT-taxable revenue above SAR 187,500 in any year from 2022 to 2025, with a deadline to integrate by 1 February 2027.