The government of Saudi Arabia at the weekend issued an executive bylaw applying to the Kingdom's new income tax, which came into force at the end of July.
According to reports in the regional media, the bylaw cuts the rate of tax payable by foreign investors from 45% to 20%, whilst stipulating that the legislation will apply to foreign shareholders in local companies (even if they are not resident in the country), and Saudis who live abroad but conduct business and therefore generate income in the Kingdom.
Explaining to the Zawya news service that the basic rules state that Saudi nationals must pay an Islamic charitable contribution known as zakat, whilst foreign investors must pay income tax, economist Ihsan Buhulaiga revealed that:
"If Saudis have companies registered abroad and conduct business in the Kingdom, they will be subject to income tax because their companies are foreign."
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