TaxSavvySA

Branch of a foreign company tax

We have a branch, not a company. Same tax?

The situation

Non-residents with a permanent establishment in Saudi Arabia pay income tax at 20 percent on PE profit.

The law

  • Income Tax Law (Royal Decree M/1 of 1425H), corporate income tax: 20 percent on net adjusted profits of the non-Saudi, non-GCC share

What it means for you

The branch must register with ZATCA, keep books and prepare annual financial statements. Head office costs charged to the branch need support to be deductible. Payments from the branch to non-residents, including some head office charges, may be subject to withholding tax.

What to do

  1. Register PE.
  2. Keep books.
  3. File.

We can do this for youAnnual income tax return for foreign-owned and mixed companies: 20 percent CIT on the foreign share plus Zakat on the Saudi share: SAR 7,500

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