Contact UsWhat is the WHT rate on technical services provided outside Saudi Arabia to a Saudi resident entity? Is there a difference in the WHT rate in the case of a related or unrelated party relationship (shareholding) between the entities?
TaxConnections Members... Answer This Question
Want To be One of Our Tax Experts? Register Here
Tax Professional Answers
Asheesh Bhandari
The WHT on technical services paid to a Saudi resident would vary between 0% and 30% depending on the country where the services are rendered and the kind of services rendered. The higher tax rate could be reduced if there is a tax treaty and conditions in that treaty are satisfied.
Usually the WHT does not change for payments by a related party although under transfer pricing rules the payer may not be allowed a full deduction for technical services paid to a group company if the tax authorities consider the payment to be excessive. In some jurisdictions, the transfer pricing rules allow the excess portion of to be recategorized as a dividend distribution which may result in a higher WHT.
Leave a Comment
592 weeks ago
Usually the WHT does not change for payments by a related party although under transfer pricing rules the payer may not be allowed a full deduction for technical services paid to a group company if the tax authorities consider the payment to be excessive. In some jurisdictions, the transfer pricing rules allow the excess portion of to be recategorized as a dividend distribution which may result in a higher WHT.