Income Tax Law (Saudi Arabia, Royal Decree No. 1, 1425 AH) in English
The Saudi Income Tax Law was issued by Royal Decree No. 1 dated 15/1/1425H (2004) and is the foundation of corporate income taxation in the Kingdom. Its reach is narrower than the name suggests: Saudi and GCC ownership interests in resident companies fall under the zakat regime instead, so the income tax primarily concerns non-GCC shareholders in resident capital companies, permanent establishments of non-resident businesses, and activity in the oil and hydrocarbons sector, which carries its own elevated rates.
Foreign investors structuring entry into Saudi Arabia, tax advisers computing the split between zakat and income tax in mixed-ownership companies, and finance teams of foreign branches all work against this text. It is applied and administered today by the Zakat, Tax and Customs Authority (ZATCA), together with its implementing regulations.
Income Tax Law (Saudi Arabia, Royal Decree No. 1, 1425 AH) Information
Who is subject to Saudi income tax rather than zakat?
Broadly, non-Saudi and non-GCC shares in resident capital companies, non-residents with a permanent establishment in the Kingdom, and businesses in oil and hydrocarbon production. Saudi and GCC interests are assessed for zakat instead, so mixed-ownership companies apportion between the two regimes.
Does the translation include the implementing regulations?
This entry is the law as issued by Royal Decree No. 1 of 1425H. The implementing regulations are a separate instrument; if you need them as well, contact us before ordering and we will confirm availability.
