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Get the discount nowHave you ever delayed remitting Withholding Tax (WHT) and faced fines from ZATCA? 🤔 Many companies run into this problem because they don’t fully understand the rules—leading to penalties worth thousands of riyals.
Quick Answer: Withholding Tax (WHT) in Saudi Arabia is imposed on payments made to non-residents for certain services. Rates range between 5% and 20% depending on the type of service, in accordance with the Zakat, Tax and Customs Authority (ZATCA) regulations.
In this guide, you’ll learn:
What WHT is in Saudi Arabia.
Who is subject to it.
Applicable tax rates by service type.
How to calculate and remit WHT step by step.
How to avoid common mistakes and penalties.
Official definition (ZATCA):
“Withholding Tax is imposed on any amount paid to a non-resident in return for services performed in the Kingdom or benefited from within the Kingdom.”
Zakat: Annual obligation on Saudi and GCC-owned companies.
Income Tax: Levied on foreign or mixed-ownership entities.
Withholding Tax (WHT): Applies only to payments made to non-residents.
Purpose of WHT:
Prevent international tax evasion.
Ensure the Saudi economy benefits from domestic business activity.
Promote financial transparency.
Saudi companies paying non-residents
Example: A Saudi company paying consulting fees, software licenses, or technology services to a foreign vendor.
Non-resident individuals providing services
Example: A foreign expert delivering an online workshop to a Saudi client.
Some services may be exempt under Double Tax Avoidance Agreements (DTAAs).
Dual contracts may require detailed interpretation.
| Service Type | WHT Rate | Practical Example |
|---|---|---|
| Professional consultancy | 5% | SAR 100,000 invoice → SAR 5,000 WHT |
| Royalties / software license | 15% | SAR 200,000 contract → SAR 30,000 WHT |
| Dividends | 5% | SAR 500,000 distribution → SAR 25,000 WHT |
| Specialized technical work | 20% | SAR 50,000 contract → SAR 10,000 WHT |
WHT=GrossPayment×ApplicableRateWHT = Gross Payment × Applicable Rate
Log in to the ZATCA portal.
Select “Withholding Tax Return” service.
Enter all required data and amounts.
Generate a SADAD bill.
Pay before the deadline.
WHT must be remitted within the first 10 days of the following month.
Late payment penalty: 1% of the tax due for every 30 days of delay.
Example:
Invoice: SAR 100,000 consulting fee.
Applicable rate: 5%.
WHT = SAR 5,000.
Must be paid via ZATCA portal before the deadline.
Confusion between taxable and non-taxable contracts
Example: Consulting fees (taxable) vs. product purchases (non-taxable).
Ignoring double taxation agreements (DTAs)
Saudi Arabia has signed 55+ treaties. Ignoring them may result in double taxation.
Errors when filing through ZATCA
Entering wrong data.
Missing certain payments.
Uploading files in invalid formats.
Applying the wrong tax rate.
Late remittance.
Forgetting small payments.
Overlooking international tax treaties.
Submitting the return in an incorrect format.
While you now understand when WHT applies and how to calculate it, managing international contracts and applying double tax treaties requires advanced expertise.
That’s where our Advanced International Tax Program comes in—helping you master these complexities and avoid costly fines.
💡 Register now for the Advanced International Tax Program at Bateel Al-Itqan Training Center and gain the confidence to handle all your WHT obligations effectively.
WHT applies to payments made to non-residents.
Rates range between 5% and 20%, depending on the type of service.
Timely remittance through the ZATCA portal protects you from fines.
Professional accountants must apply the rules accurately and avoid common mistakes.
Q1: Does WHT apply to all payments to non-residents?
No, only to specific services defined under ZATCA regulations.
Q2: What’s the difference between WHT and VAT?
WHT applies to payments made to non-residents.
VAT applies to domestic sales of goods and services in Saudi Arabia.
Q3: How can I benefit from Double Taxation Agreements (DTAAs)?
By reviewing the agreement signed between Saudi Arabia and the non-resident’s country and submitting the required documents to ZATCA to claim treaty benefits.
