Saudi Arabia Collects New Tax On Expats

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Saudi Arabia Collects New Tax On Expats

From July, Saudi Arabia is collecting a new tax from expats and their dependants, a move that is seen to boost the country’s revenues amid weak oil prices.

The new fee will be 100 Saudi riyals (SAR) per dependant per month, around £21 or $27. The amount is expected to increase gradually every year until 2020. By next year, the figure will double to SAR200 and increase to SAR300 in 2019 and SAR400 in 2020.

According to a briefing paper prepared by accountants PWC, reforms such as the levy on foreign workers may help augment government revenues, but they can increase the cost of doing business in the kingdom.

Companies in Saudi Arabia currently spend SAR200 a month to cover the levy for every non-Saudi employee. This applies to organisations where foreigners exceed the number of local workers.

Starting next year, the fee will be increased gradually until 2020. And for foreign workers not exceeding the number of Saudi staff, the fee will no longer be waived, but will be imposed at a discounted rate.

Linked proposals to collect income and remittance taxes have yet to be implemented.

Moving Abroad Checklist

Initial Considerations

Will your partner be travelling with you?

If so, what will they be giving up in your present home and will they be able to continue with their career in your new home? You will need to check whether a separate visa is required for your partner to work or if your visa gives that right. If they are unable to work you will need to decide on the effect on your finances and what alternatives are available to give a fulfilling life (home business, training, voluntary work).

Are you taking family with you?

Moving with family raises many exciting opportunities, but also can create challenges. The HSBC Expat Explorer survey indicates that expat kids can take six months to settle in to their new country (see article). Getting young or even older children to prepare to move and leave their friends and family behind can be a challenge and should be thought through.

The options for education is another area that needs to be thought through.

Moving your child to a new country with a different education system can be a great opportunity to broaden their experience, but if they are close to key exams the timing can make this inadvisable. If you do take your family with you, it is important to decide between joining the local school system or choosing an international school.

Where will you be living?

Whether you will be living in a house or apartment, furnished or unfurnished, these decisions will affect what you need to take with you. The time you are planning to live overseas will also affect whether you should leave your property at home empty, rent it out or sell it. See the article Sell, Store or Ship.