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What Is Withholding Tax, and When Does It Apply to Foreign Companies?

Withholding tax is a concept every foreign investor dealing with entities inside the Kingdom must grasp, as it relates to payments directed to non-residents.

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What is withholding tax?

A tax withheld from certain payments made by an entity inside the Kingdom to a non-resident for income realized from a source within the Kingdom.

On which payments may it apply?

Various types such as royalties, service fees, interest, and dividends, as specified by the Income Tax Law and its regulations.

Who is obligated?

The paying entity inside the Kingdom is responsible for withholding the tax and remitting it to the competent authority on time.

Effect of treaties

A double-taxation treaty may reduce the withholding rate or exempt certain payments under its conditions.

Disciplined wording

Types and rates are set by the regulations, are subject to update, and must be verified against the text in force for each case.

How Jewark helps

We flag potential withholding obligations in your dealings early and connect you with specialists to ensure compliance.

Making payments to non-residents? Contact Jewark to review your withholding tax obligations.

📧 contact@jewark.com — 🌐 www.jewark.com — 📱 +966 55 160 1624

Disclaimer: This content is published based on the regulations in force as of August 2026; fees, timelines, conditions, and percentages may change thereafter. It is provided for general informational purposes and does not substitute for verification from official sources or advice specific to each case.

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