Monthly withholding tax on payments to non-residents: rates, return and payment by the 10th
Every time you pay a foreign party, tax may need holding back. We classify each payment, apply the right rate or treaty relief, file the monthly return and pay by the 10th, and prepare the annual WHT statement.
SAR 750Monthly
For: Saudi resident companies and permanent establishments paying non-residents for services, royalties, rent, interest, dividends, management fees, tickets, freight or insurance.
What we need from you
List of payments to non-residents in the month
Basis for WHT
Contracts and invoices for each payment
Classify type of payment
Recipient country and tax residency certificate
Treaty rate claim
Whether recipient is a related party
Some advisers apply a higher rate to related party technical services
Bank payment dates
Month of payment decides due date
What we discuss
What exactly is the service: technical, management or other?
Rate is 5, 15 or 20 percent by type
Is there a tax treaty with the recipient's country?
Treaty may reduce the rate
Does the contract say who bears the WHT?
Gross-up changes the base
Is the service done inside or outside Saudi Arabia?
Source rules decide if WHT applies
What we file
Classify and compute WHT
Example: SAR 100,000 technical services 5% = SAR 5,000; SAR 50,000 royalty 15% = SAR 7,500; SAR 40,000 management fee 20% = SAR 8,000; total SAR 20,500
File monthly WHT return
Annual WHT information return
What you get
Monthly WHT return and payment number
WHT certificates for recipients
Payment classification register
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 Source
- Art 77, Income Tax Law: Delay fine of 1 percent of unpaid tax for each 30 days; 25 percent of the tax difference for incorrect returns Source
Questions people ask
Contact us to book
Online payment in SAR is not open yet. Send us a message and an adviser for Saudi Arabia confirms the scope and the fee before any work starts.