Saudi Business Taxes: VAT, Zakat and CIT Explained

Businesses operating in Saudi Arabia are subject to three main levies: value-added tax (VAT), zakat, and corporate income tax (CIT). Registration and filing for all three run through the Zakat, Tax and Customs Authority (ZATCA) portal, and no personal income tax is charged on salaries in the Kingdom.

VAT is applied at 15% on most goods and services. A business must register once its annual taxable supplies exceed SAR 375,000, while voluntary registration is available for turnover between SAR 187,500 and SAR 375,000. Companies with annual turnover above SAR 40 million file VAT returns monthly; others file quarterly. A fixed fine of SAR 10,000 applies for late VAT registration.

Zakat applies to Saudi and GCC-owned businesses at 2.5% of the zakat base for a Hijri year, or 2.5778% for those reporting on a Gregorian year. Foreign-owned businesses instead pay corporate income tax at 20% of net adjusted taxable income. Mixed-ownership companies are taxed proportionally, with the Saudi/GCC share under zakat and the foreign share under CIT.

CIT returns must be filed within 120 days after the end of the fiscal year. For calendar-year taxpayers, the deadline is 30 April.

Why it matters

Recent updates extending into 2026 keep the framework steady: the 15% VAT rate continues, the 20% CIT and 2.5% zakat split remains in place, and no nationwide personal income tax has been introduced. For residents and expats running or planning a business, understanding which category applies—and meeting filing deadlines through the official portal—helps avoid penalties and keeps operations compliant.

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