Zakat or Income Tax? How Saudi Business Taxation Actually Works
Saudi Arabia runs a dual system for business taxation — which one applies to your company depends entirely on who owns it, not what industry it's in.
Estimate your business Zakat
Enter your estimated Zakat base to see the 2.5% due.
The ownership split
Companies (or shares of companies) owned by Saudi or GCC nationals are subject to Zakat — 2.5% of the company's Zakat base, administered by ZATCA. The foreign-owned share of a company is instead subject to corporate income tax, generally at 20%.
What's the "Zakat base"?
Unlike personal Zakat (based on wealth held), business Zakat is based on a defined Zakat base — broadly, equity, reserves and specific adjustments, minus net fixed assets and other permitted deductions. It's a more technical calculation than personal Zakat, and getting it right often benefits from a tax advisor familiar with ZATCA's specific rules.
Frequently asked questions
Do foreign-owned companies in Saudi Arabia pay Zakat too?
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