Working in Saudi Arabia is one of the best prospects for UAE-based entrepreneurs. Thousands of companies in Dubai are currently entering the kingdom with Vision 2030, massive infrastructure construction and investor-friendly policies.

However, to operate, a company must first understand corporate tax in Saudi Arabia. This tax system is introduced and regulated by the Zakat, Taxes and Customs Authority (ZATCA) and simplifies the financial operations and compliance of foreign-owned businesses.

This guide will tell you everything Dubai companies need to know about Saudi corporate tax rates, reporting and compliance regulations and updates up to 2025, as well as how DBS Group can help you ensure full compliance and a stress-free experience when expanding into KSA.

What Is Meant by Corporate Tax in Saudi Arabia?

Corporate tax in Saudi Arabia is imposed on non-Saudi and non-GCC investors who generate income in the kingdom. On the one hand, Saudi and GCC citizens do not pay corporate tax but do pay Zakat.

If a business is characterized by mixed ownership (Saudi + foreign investors):

• The Saudi/GCC portion is subject to Zakat, and

• Corporate tax is in relation to the foreign ownership.

This is particularly relevant for corporate tax of Dubai companies as UAE owners are not considered Saudi investors.

The Reason Why Dubai Businesses Should Know Saudi Corporate Tax

As more UAE companies move to Saudi Arabia, taxing their companies will help avoid the following:

• Efficient cross-border business: Timely tax planning will help UAE businesses avoid penalties and delays.

• Accurate financial forecasting: Understanding tax liabilities allows Dubai companies to plan their Saudi income properly.

• Improved investment decisions: Knowledge of tax rates helps calculate profitability and business structure.

• Strong compliance for long-term expansion: Good compliance builds trust with Saudi authorities, investors and banks.

This is where DBS Business Setup Consultancy Group enters the equation by helping Dubai businesses navigate these steps of KSA tax registration, filing and compliance.

Advantages of Saudi Arabia Corporate Tax System

Corporate taxation strategies in Saudi Arabia provide the following benefits:

Increases government revenue: Corporate taxation contributes to infrastructure, technology development, transportation, and social services, which advance the kingdom’s long-term economic objectives.

Promotes economic diversification: The tax system is helping the economy move away from oil dependence, as it is promoting other sectors such as technology, logistics, retail, and manufacturing.

Attracts foreign investors: Clear regulations and online tax systems will ensure that foreign entrepreneurs establish themselves in the kingdom.

Enforces business discipline: Businesses are advised to maintain proper financial records and comply with harmonized laws.

Complies with international standards: Saudi Arabia is now well aligned with international tax standards, which has increased confidence among multinational organizations.

Who Should Pay Corporate Tax in Saudi Arabia?

According to Saudi tax law, the following entities are required to pay corporate income tax:

• Companies wholly or partly owned by non-Saudi/non-GCC investors.

• Most businesses based in Dubai that have KSA operations fall into this category.

• Foreign companies through a permanent establishment (PE).

• This includes branches, subsidiaries, warehouses or offices in Saudi Arabia.

• Non-residents whose income is of Saudi origin.

• Tax is applicable even in the absence of physical presence if the income is of KSA origin.

• Entities or companies investing in natural gas.

• Entities dealing in oil or hydrocarbons.

These industries enjoy special tax rates (much higher than the normal rates).

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Corporate Tax Rates in Saudi Arabia (2025)

The corporate tax rate is: 20% on net adjusted profit

However, some sectors are governed by other rules:

• Hydrocarbon and oil activities

• The tax rate is 50-85 percent, and this varies depending on the product.

• Natural gas investments

• Are taxed independently, with an independent calculation of the tax.

• Zakat rate

Companies wholly owned by Saudi or GCC nationals pay:

• Zakat based on the zakat base (net value) of 2.5%.

• This is limited to Saudi/GCC shareholders.

Other Taxes Applicable in Saudi Arabia (2025)

Compared to Western markets, Saudi Arabia does not levy many of these taxes, making the country attractive to Dubai investors.

• No capital duty

• No payroll tax

• No stamp duty

• Real Estate Transaction Tax (RETT): 5 percent.

• Withholding tax: 5 percent-20 percent (depending on the nature of the service)

• VAT: 15% (standard rate)

This simple architecture helps companies enjoy predictable financial planning when expanding from Dubai to KSA.

Corporate Tax Compliance Requirement Saudi Arabia.

The requirements for businesses operating in the Emirate of Dubai are as follows:

Register with ZATCA: All other taxable entities must be registered with the Zakat, Tax and Customs Authority.

Maintain accurate financial records: Audited financial statements are mandatory.

Corporate tax returns must be filed no later than 120 days after the end of the year.

For example:

If your financial year ends on December 31, 2024, you need to file by April 29, 2025.

Pay corporate taxes on time: Payments are made quarterly or annually, depending on the entity.

Comply with withholding tax regulations.

Any payments to non-residents are subject to withholding tax.

Failure to comply can lead to fines, time wasted, and legal issues.

The Reason Dubai Companies Choose DBS Group?

Expanding into Saudi Arabia is very profitable, but tax compliance can be complicated. This is where DBS Group, one of the UAE’s trusted business setup and tax compliance solutions, comes in.

DBS Group helps you with:

• Corporate tax registration in Saudi Arabia.

• ZATCA filing (Corporate Tax + Zakat).

• Audited financial statements.

• Withholding tax compliance.

• VAT registration and VAT return filing.

• Ongoing financial and tax advice.

• Assistance in avoiding penalties.

• Full liaison with the Saudi government.

Whether it’s your first branch in Saudi or expanding to multiple cities, DBS Group will save you time and hassle in ensuring that compliance is accurate, integrated and timely so you can focus on growing your business.

Conclusion

Corporate tax in Saudi Arabia is an essential part of doing business in the kingdom – especially for Dubai-based businessmen who cross borders. With a general tax rate of 20% and clear guidelines and electronic filing, the tax environment in Saudi Arabia is streamlined and internationally acceptable.

However, to comply, it is essential to be accurate, timely and well-documented.

To remain operational without any penalties and disruptions, it is always advisable to collaborate with professionals like DBS Group to ensure that your business is not in breach of the changing rules of ZATCA.

Whether you need corporate tax filings, financial structuring or setting up your branch in Saudi, DBS Business Setup Consultancy Group can assist you throughout the process.

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