Are Gulf-owned companies in Saudi Arabia subject to zakat or income tax?
Saudi tax authority clarifies whether companies in the Kingdom owned by GCC nationals are liable for zakat or income tax.
Key Takeaways
AIA question was submitted to the Zakat, Tax and Customs Authority by a follower, asking: "If a company in Saudi Arabia is owned by a Gulf national, is it subject to zakat or income tax?"
The authority explained, via its 'Ask Zakat, Tax and Customs' account on X, that income tax applies to resident capital companies on the shares of non-Saudi partners, and only to non-resident individuals who conduct economic activities or earn income from economic activities in the Kingdom.
View the post on X
The authority noted that zakat is due from any Saudi or Gulf establishment that meets the residency requirements in the Kingdom, as well as on the shares of Saudi partners in mixed entities.
It added: "For details on the residency requirements, refer to Articles 4 and 5 of the Executive Regulations for Zakat Collection at the following link: http://zat.ca/Soa8Py."