Khobar, Saudi Arabia

Withholding Tax (WHT) Advisory in the UAE and Saudi Arabia

Withholding tax sounds technical, but the idea is straightforward: when your company pays certain amounts to someone outside the country — a foreign consultant, a parent company abroad, or an IP licensor overseas — the tax authority may require you to deduct tax at source and remit it before the payment clears. In Saudi Arabia, ZATCA actively enforces this. Rates depend on the payment type: typically 5% on dividends and interest, 15% on royalties, and 5%, 15%, or 20% on cross-border services depending on circumstances — all filed monthly through ZATCA's portal. The UAE tells a different story. Under Federal Corporate Tax Law Article 45, the domestic withholding tax rate is currently 0%, reflecting the UAE's position as an international business hub. That does not mean cross-border payments are never scrutinised — treaty positions, documentation, and future law changes still matter — but the day-to-day compliance burden is far lighter than in the Kingdom. Getting the jurisdiction wrong is one of the costliest mistakes we see.