Quick answer
Saudi Arabia has no personal income tax, but in 2026 it charges several specific taxes: 15% VAT, excise of 100% on tobacco and energy drinks, 5% real estate transaction tax on property transfers, a white land fee on idle urban land, customs duties mostly at 5%, and withholding tax of 5% to 20% on payments abroad.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Find my savings →You live in, invest in or sell into Saudi Arabia, and you have heard that tax there is zero. For your salary it is. This guide lists the taxes that do apply in 2026, who pays them, and where expats and founders most often get caught.
Saudi Arabia specific taxes in 2026: the key figures
| Tax | 2026 rate or rule |
|---|---|
| Value added tax (VAT) | 15%; mandatory registration above SAR 375,000 of annual taxable supplies |
| Excise tax | 100% on tobacco, energy drinks and vaping products; sweetened drinks taxed by sugar content |
| Real estate transaction tax (RETT) | 5% of the value of the property transferred |
| White land fee | Annual fee on undeveloped urban land, up to 10% of value under the 2025 reform |
| Customs duties | GCC common tariff, mostly 5%, higher on some goods |
| Withholding tax (WHT) | 5% to 20% on payments to non-residents |
| Zakat on businesses | About 2.5% of the zakat base for Saudi and GCC-owned shares |
| Inheritance, gift and wealth tax | None |
Is this guide for you?
Read on if you…
- run a business that sells to Saudi customers or pays foreign suppliers;
- plan to buy, sell or hold land or property in the Kingdom;
- want the full cost of living and doing business beyond income tax.
Probably not your case if you…
- want corporate income tax or zakat in detail, covered in our corporate income taxes in Saudi Arabia guide;
- only want to know about tax on your salary, which is 0%.
How does VAT work in Saudi Arabia?
VAT is a tax on consumption, collected by businesses at each sale. The standard rate has been 15% since July 2020.
- Registration: mandatory once taxable supplies exceed SAR 375,000 in 12 months. Voluntary from SAR 187,500.
- Zero rate: exports, international transport and some medicines and medical equipment.
- Exemptions: most financial services with an implicit margin, and residential rent.
- Filing: monthly if turnover exceeds SAR 40 million, quarterly otherwise.
- E-invoicing: every VAT-registered business must issue electronic invoices under the FATOORA system. Phase 2 integration with ZATCA is rolling out in waves by turnover.
Here's the catch for foreign service providers. If you sell digital or other services to Saudi consumers with no local presence, you may still need to register. There is no threshold for non-residents making taxable supplies in the Kingdom. For business clients, the Saudi customer usually accounts for VAT under the reverse charge – they self-assess it instead of you.
Which goods carry excise tax?
Excise tax is an extra tax on goods seen as harmful. Saudi Arabia applies it at import or production:
| Product | Rate |
|---|---|
| Tobacco and tobacco products | 100% |
| Energy drinks | 100% |
| Electronic smoking devices and liquids | 100% |
| Sweetened and carbonated drinks | Previously 50%; moving to a tiered model by sugar content from 2026 |
VAT then applies on top of the excise-inclusive price. For a consumer, a can of energy drink costs more than double its pre-tax price.
What do you pay when you buy or sell property?
Real estate transaction tax
RETT is 5% of the value of any real estate disposal: sale, gift, long lease above a set term, or contribution to a company. The seller is legally liable, though contracts often shift it. Transfers of residential property are outside VAT. Saudi citizens buying a first home have an exemption up to SAR 1 million, borne by the state.
Foreign ownership is opening up. A law allowing non-Saudis to own property in designated zones took effect in 2026. Gains on sale are covered in capital gains tax in Saudi Arabia.
White land fee
Owners of undeveloped land inside urban limits pay an annual fee. A 2025 reform raised the maximum rate to 10% of land value and added a fee on vacant buildings. The fee aims to push idle land into development.
Which payments abroad face withholding tax?
When a Saudi business pays a non-resident without a Saudi PE, it withholds tax at source:
| Payment | WHT rate |
|---|---|
| Dividends, interest, rent, technical and consulting services, airline and shipping fees | 5% |
| Royalties, payments to head office for services | 15% |
| Management fees | 20% |
Treaties can reduce these rates. You need a tax residency certificate from your country to claim the lower rate.
What other charges should expats budget for?
These are not taxes in law, but they hit your wallet like taxes:
- Expat levy: a monthly fee per foreign worker, paid by employers.
- Dependant fee: SAR 400 per month for each family member on an expat's iqama.
- Municipal and licence fees: for shops, signs and commercial premises.
The personal tax deductions and benefits in Saudi Arabia guide shows how these fit into your take-home pay.
Example – Omar, Egyptian consultant with a Riyadh LLC
Omar's company earns SAR 900,000 from Saudi clients. It registers for VAT and charges 15%: SAR 135,000 collected and paid to ZATCA, minus VAT on its own costs. It pays a UK designer SAR 50,000 for technical services and withholds 5%: SAR 2,500. In 2026 Omar buys an office for SAR 2,000,000; the seller owes 5% RETT, SAR 100,000. Omar's own salary stays at 0% tax.
Omar's setup has three moving parts. Yours probably does too.
Find out which Saudi taxes really apply to your business, and where you can pay less legally.
Find my savings →Common mistakes (and what they cost)
- Late VAT registration → a SAR 10,000 fine plus back VAT on past sales.
- Paying foreign suppliers without withholding → the Saudi payer owes the WHT itself, plus 1% per 30 days of delay.
- Ignoring FATOORA requirements → fines for each non-compliant invoice and blocked input VAT.
- Forgetting RETT on a property sale → the deed transfer stalls until RETT is paid.
- Holding idle urban land → annual white land fees that can wipe out the gain.
Frequently asked questions
Frequently asked questions
What taxes do you pay in Saudi Arabia if there is no income tax?
Individuals mostly pay indirect taxes: 15% VAT on goods and services, excise on tobacco and energy drinks, 5% RETT on property transfers and customs duties on imports. Businesses also pay corporate income tax or zakat and withhold tax on payments to non-residents. There is no inheritance, gift or wealth tax.
What is the VAT rate in Saudi Arabia in 2026?
The standard VAT rate is 15%, unchanged since July 2020. Businesses must register once taxable supplies exceed SAR 375,000 a year and can register voluntarily from SAR 187,500. Exports and some medical items are zero-rated, while residential rent and many financial services are exempt.
How much is the real estate transaction tax in Saudi Arabia?
RETT is 5% of the value of the property disposed of, whether by sale, gift or certain long leases. The seller is liable, although the contract can allocate it differently. Saudi citizens buying a first home benefit from an exemption up to SAR 1 million, borne by the state.
Is there inheritance tax in Saudi Arabia?
No. Saudi Arabia does not tax inheritances, gifts or personal wealth. Estates pass under Islamic inheritance rules for Muslims, which fix shares among heirs. RETT may apply when inherited property is later sold or transferred, so check the exemptions that cover transfers between heirs before registering the deed.
What withholding tax applies to payments abroad from Saudi Arabia?
Saudi payers withhold 5% on dividends, interest, rent and technical services, 15% on royalties and on payments to a head office for services, and 20% on management fees. A tax treaty can reduce these rates if the foreign recipient provides a valid tax residency certificate from its home country.
How do Saudi specific taxes compare with the UAE?
The UAE charges 5% VAT, a third of the Saudi rate, and a 4% Dubai property registration fee rather than a federal transfer tax. Both levy 100% excise on tobacco and energy drinks. See specific taxes in the United Arab Emirates for the details.
Related guides
- Corporate income taxes in Saudi Arabia
- Capital gains tax in Saudi Arabia: property, shares and crypto
- Personal tax deductions and benefits in Saudi Arabia
- Legal forms of business in Saudi Arabia
- Saudi Arabia tax landscape overview
- Specific taxes in the United Arab Emirates
- Specific taxes in Lebanon
- All country tax guides
Sources
- Zakat, Tax and Customs Authority (ZATCA) – VAT, excise, RETT and WHT
- Bureau of Experts – Saudi laws portal (VAT Law, Excise Tax Law, RETT Regulations)
- Ministry of Municipalities and Housing
- OECD – Global Forum on Transparency and Exchange of Information
- PwC Worldwide Tax Summaries – Saudi Arabia, other taxes
This guide is general information, not personalised tax advice. See how we research and review.
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