Germany And Saudi Arabia Negotiate Double Tax Treaty

by Ulrika Lomas, Tax-News.com, Brussels

16 May 2002

Earlier this week, Dr Jobara Al-Soraisry, Saudi Arabia's Deputy Minister for Finance for International Cooperation announced that a double tax treaty is currently under negotiation with Germany.

Dr Al-Soraisry was speaking at the beginning of a two day event organised by the Baden-Wurttemberg Agency for International Economic Cooperation. According the Deputy Prime Minister and Minister for Economic Affairs in Badem-Wurttemberg, Dr Walter Doring, the province accounts for almost 20% of German exports to the Kingdom, meaning that the region has a great interest in fostering increased bilateral cooperation.

The Saudi Deputy Finance Minister told those attending the event that he hoped that the treaty for the avoidance of double taxation, when finalised, would boost German investment in the Kingdom, which currently stands at around $400 million. He also added that the agreement will benefit German expatrites living and working in Saudi Arabia when the new expat income tax comes into force.

The Shoura advisory committee announced earlier this month that it had endorsed draft legislation requiring foreign workers in the region to pay income taxes on earnings over SR3,000 ($800) at a rate of 10% of their monthly salary. However the new tax, when approved by the government, will not apply to expatriate workers from countries with which the Kingdom has a double tax treaty.

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