Saudi companies paying foreign service providers: withholding tax rates and filing

A Saudi company paying a London consultancy, a US software firm or an Indian engineering contractor may need to withhold tax before the money leaves. The rate depends on the type of payment and whether the provider is related. ZATCA expects the return by the tenth of the next month.

Rashidatou K.Payments editor

Published: 9 October 2026
Reading time: 2 min read

A Jeddah logistics group hires a London consultancy for a SAR 187,500 network study. Its treasury team prepares the transfer; its tax team stops it. The payment is for consulting services used in Saudi Arabia, so withholding tax applies, and the UK-Saudi tax treaty may change the rate. The return is due by the tenth of next month.

What withholding tax covers

Saudi residents, and permanent establishments of non-residents, withhold tax on payments to non-residents from sources in Saudi Arabia. Common categories:

technical and consulting services,
royalties,
management fees,
dividends and interest,
rent, international telecoms, air tickets and freight.

A service can be Saudi-source if it is used or benefited from in Saudi Arabia, even if performed abroad. The rules are detailed; check each new type of payment.

Rates

Rates differ by category and by whether the provider is related:

5 percent for technical and consulting services to unrelated parties, and several other categories,
15 percent for royalties, and for services paid to related parties,
20 percent for management fees.

Check the current table in the income tax regulations before relying on these.

Treaties

Saudi Arabia has many double taxation agreements. To apply treaty rates, obtain the provider's certificate of tax residence and meet ZATCA's conditions. Some relief applies at source; some is reclaimed afterwards.

Filing

The payer files the withholding return and pays the tax within the first ten days of the month after payment. Late filing and payment carry penalties.

Who bears the cost

Foreign providers often quote net of tax. If the contract is grossed up, the Saudi company pays the withholding on top. Agree it before you sign.

Paying into Saudi Arabia: the local rail

What	Detail
Local rail	sarie instant payments
Run by	Saudi Central Bank (SAMA)
Settlement	Seconds, 24/7

Source: SAMA: sarie. Checked when this guide was last updated; the scheme's own page has the current figures.

Where Rivet fits

Rivet does not calculate or file Saudi withholding tax. A Rivet business account accepts registered companies after verification, including Saudi companies, subject to local rules, and pays providers in 120+ countries with each payment matched to its invoice. Rivet is not a bank; regulated partner institutions hold the funds.

Questions people ask

Which payments to non-residents carry withholding tax?

Payments from a Saudi source for services, royalties, dividends, interest, rent and others listed in the regulations. Whether a service is Saudi-source depends on where it is used and performed.

What rates apply?

Commonly 5 percent for technical and consulting services to unrelated parties, 15 percent for royalties and services to related parties, and 20 percent for management fees. Check the current table in the regulations.

How do I apply a treaty?

Obtain the provider's certificate of tax residence and complete ZATCA's requirements for treaty relief. Some relief is applied at source, some by refund.

When is the withholding return due?

Within the first ten days of the month following the payment.

Sources

Written by

Rashidatou K.

Payments editor

Rashidatou writes Rivet's guides to how money moves between countries: the payment rails, what each one costs, and the account details a company needs to get paid in another currency. Every figure in Rashidatou's articles is traced to the scheme rulebook, the regulator or the provider's published price list, and those sources are listed at the end.