TaxSavvySA

Management fee rate

Head office charges a management fee. Which WHT rate?

The situation

Management fees paid to non-residents are subject to 20 percent WHT. The tax is withheld from the payment and paid to ZATCA by the 10th of the following month.

The law

  • Art 68, Income Tax Law and Art 63, Implementing Regulations: Residents and PEs withhold tax on payments to non-residents from a Saudi source at 5, 15 or 20 percent

What it means for you

Example: management fee SAR 500,000 x 20 percent = SAR 100,000 WHT, due by the 10th of the month after payment. The same charge must be supported for transfer pricing and for deductibility in your income tax return.

What to do

  1. Apply 20 percent.
  2. File.
  3. Document TP.

We can do this for youMonthly withholding tax on payments to non-residents: rates, return and payment by the 10th: SAR 750

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