From July, expats working in the Kingdom will have to pay the Saudi government SAR100 (£21, $27, €24) each month per dependent, according to the country’s Fiscal Balance Programme 2020.
The levy will increase by SAR100 each July before hitting SAR400 in 2020.
When the 2020 programme was launched in December 2016, the government said: “Saudi Arabia has one of the most liberal labour policies globally, with very few restrictions on importing foreign labour to work in the kingdom.
“Currently, neither Saudi nationals nor foreign labourers pay income taxes, and this policy will remain in place.”
Corporate expat levy
Companies currently pay SAR200 per month per expat employee, but only where the number of expats is greater than Saudi or Gulf Cooperation Council (GCC) workers.
Moving forward, the levy on all expats will be gradually revised upwards, which the government intends to prompt employers to hire more Saudis.
The fee will no longer be waived for expats not exceeding the number of Saudi/GCC employees.
From January 2018, where there is an equal or lower number of expats compared with Saudi/GCC workers, companies will pay SAR300 per month, rising to SAR500 in a year later, and increasing to SAR700 in 2020.
When the number of expats exceeds Saudi/GCC employees, companies will be charged SAR400 per month from January 2018. This will rise to SAR600 per month in January 2019 and increase again a year later to SAR800 per month.
VAT
Value added tax (VAT) of 5% will be implemented in the first quarter of 2018, in line with other GC countries.
