Source: https://rivet.global/blog/saudi-corporate-tax-and-zakat-for-foreign-owned-companies
Published: 2026-07-06 · Updated: 2026-07-06 · By Alexia M.

# Saudi corporate tax and zakat for foreign-owned companies

How Saudi Arabia taxes mixed-ownership companies: 20% income tax on the foreign share, 2.5% zakat on the Saudi and GCC share, filing deadlines and records.

## Key takeaways

- Saudi Arabia charges corporate income tax at 20% on the share of taxable profit attributable to non-Saudi, non-GCC owners.
- Zakat at 2.5% applies to the Saudi and GCC owners' share of the zakat base, which is calculated differently from taxable profit.
- A company with mixed ownership files a combined return with ZATCA within 120 days of its financial year end.
- Payments to non-residents carry withholding tax at rates set by payment type, filed monthly.

Google suggests "ksa corporate tax rate" and "saudi business tax rate" next to "saudi corporate tax". The answer for a foreign-owned company has two parts, because Saudi Arabia levies tax and zakat side by side.

## How the split works

| Owner | Levy | Rate |
|---|---|---|
| Non-Saudi, non-GCC shareholders | Corporate income tax on their share of taxable profit | 20% |
| Saudi and GCC shareholders | Zakat on their share of the zakat base | 2.5% |

A company 60% owned by a UK investor and 40% by a Saudi partner, with SAR 2 million of taxable profit, pays income tax of 20% on SAR 1.2 million: SAR 240,000. Zakat is then 2.5% of the Saudi share of the zakat base, which depends on the balance sheet.

## Filing

The combined return and payment are due within 120 days after the financial year ends. Companies file through ZATCA's portal with financial statements. Withholding tax on payments to non-residents is filed monthly, within 10 days after the month in which payment was made.

## Withholding on payments abroad

Saudi companies paying non-residents for services, royalties, rent and other items withhold at rates from 5% to 20% by payment type. Our article on [Saudi companies paying foreign providers](/blog/saudi-companies-paying-foreign-providers-withholding-tax) covers the rates and filing.

## Records ZATCA expects

Accounting books in Arabic or with Arabic translations available, kept in Saudi Arabia, plus invoices that meet the e-invoicing rules in [ZATCA's Fatoora waves](/blog/saudi-zatca-fatoora-integration-waves). Payment records that show each counterparty and amount make the withholding filings simpler to support.

## 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](https://www.sama.gov.sa/). Checked when this guide was last updated; the scheme's own page has the current figures.

## Where Rivet fits

Rivet records each receipt and payout with its counterparty, currency and date on one ledger, and exports statements and receipts for your accountant. USD details come on the free Starter plan and EUR and GBP on Growth, with payouts to 120+ countries. Check our eligibility list for Saudi companies. Rivet is not a bank; regulated partner institutions hold the funds. See [Accounts](/accounts).

## Questions

### What is the corporate tax rate in Saudi Arabia?

20% on the foreign-owned share of taxable profit. Higher rates apply in oil and hydrocarbon production. Saudi and GCC-owned shares pay zakat instead.

### How is zakat calculated?

On the zakat base, broadly equity and long-term funding less certain fixed assets and investments, or on adjusted profit if higher, at 2.5%. ZATCA publishes the rules.

### When is the return due?

Within 120 days after the end of the financial year, with payment due by the same date.

### What about VAT?

Saudi VAT is 15%. Registration is mandatory above SAR 375,000 of annual taxable supplies.