TaxSavvySA

GCC shareholder tax treatment

Our Emirati shareholder: tax or Zakat?

The situation

GCC nationals are treated like Saudi citizens, so their share pays Zakat, not income tax. The rest of the profit belonging to non-GCC foreign shareholders still pays 20 percent income tax.

The law

  • Income Tax Law and Zakat Regulation, mixed ownership: Non-Saudi, non-GCC share pays 20 percent income tax; Saudi and GCC share pays Zakat

What it means for you

Keep proof of the shareholder's GCC nationality on file, such as a passport copy. Their share goes to the Zakat base, while any other foreign shareholder's share of profit still pays 20 percent income tax. Make sure the ZATCA profile shows the correct nationality for each shareholder.

What to do

  1. Confirm nationalities.
  2. Split.
  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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