Tax in Saudi Arabia for expats works very differently from tax in the UK. Saudi Arabia does not tax individuals on salaries from employment, and the Zakat, Tax and Customs Authority (ZATCA) applies income tax to non-Saudi individuals mainly where they carry on a business or commercial activity in the Kingdom, at a flat 20% on the profit. Zakat applies to Saudi and GCC nationals, not to other expats, and there is no personal inheritance tax. That does not mean a move to Riyadh, Jeddah or the Eastern Province ends every tax question. VAT at 15%, the real estate transaction tax, employer social insurance and end of service awards all affect expats, and for British expats UK tax can continue on UK rental income, UK property gains, some UK pensions and, for long-term UK residents, UK inheritance tax. The UK and Saudi Arabia double taxation convention allocates taxing rights over UK pensions, interest, dividends and gains between the two countries. This guide explains how Saudi tax applies to expats, how Saudi residence is decided, what the treaty says about UK pensions and investments, and the UK points to plan around. It is general information, not personal tax advice. Saudi rules are stated as at the review date, UK rules and figures are for the 2026 to 2027 tax year unless another date is given, the information was reviewed on 7 November 2026, and all rules and figures should be rechecked before you rely on them.
Saudi Arabia has no personal income tax on employment income. Under the Income Tax Law issued by Royal Decree M/1 of 1425H (2004) and its Implementing Regulations, income tax is charged on, among others, non-Saudi residents who carry on business in the Kingdom, non-residents who do business through a permanent establishment in the Kingdom, and non-residents with other income from a Saudi source, with domestic withholding tax collected from many payments made to non-residents. Salaries and allowances paid to employees, Saudi or foreign, are not within the charge, and professional summaries reviewed in 2026, including PwC's Worldwide Tax Summaries, confirm that income from employment in Saudi Arabia alone is not subject to income tax for individuals. There is also no Saudi income tax on an expat's end of service award. Zakat, the Islamic levy collected by ZATCA, applies to Saudi nationals and to GCC nationals treated in the same way, and to businesses owned by them, with the detail depending on ZATCA's rules, rather than to other expats. Saudi Arabia does not levy a personal inheritance, estate or gift tax. Our guide to becoming a tax resident in the UAE covers the equivalent questions for the UAE.
The main exception for expats is business income. A non-Saudi individual who is resident in Saudi Arabia and carries on an activity in the Kingdom with the intention of making a profit, which ZATCA describes widely as commercial, professional, vocational or any other activity, with examples in its guidance including services, investment and leasing, is generally subject to income tax at 20% on the net profit from Saudi sources, after deductible expenses, with the taxable base and source rules depending on the activity, and must register with ZATCA, file an annual return and pay within 120 days of the end of the tax year. ZATCA's guidance on resident natural persons describes this as applying to residents without Saudi nationality who are involved in commercial activity of any kind with the intention of making a profit. Many expats will never be within it, but side businesses, consultancy outside an employment contract and some property or trading activity can raise the question, and the rules on what counts as business are detailed. Saudi Arabia published drafts of a new Income Tax Law for public consultation in 2023. The drafts reaffirm that employment income of non-Saudi resident individuals is not taxable but would extend the tax for individuals carrying on commercial activity to some income from outside the Kingdom. We had not been able to confirm that a new law had been enacted when this guide was last reviewed, so the status should be rechecked. ZATCA's guidance excludes trading in shares listed on the Saudi market by a resident individual from taxable activity, and the current law exempts gains on disposing of securities traded on the Saudi Exchange (Tadawul), subject to conditions, so unlisted shares and property dealings should be checked separately.
Under Article 3 of the Income Tax Law, a natural person is resident in Saudi Arabia for a tax year if they have a permanent place of residence in the Kingdom and are present for a total of at least 30 days in the year, or if they are present for at least 183 days in the year. ZATCA's guidance treats a home as a permanent place of residence where it is owned, rented or otherwise provided for at least a year, part of a day in Saudi Arabia counts as a whole day, and days spent in transit between two places outside the Kingdom do not count. Because employees are not taxed on salary, residence matters most for business income and for treaty purposes. Treaty residence is a separate question. Article 4 of the UK and Saudi Arabia double taxation convention treats a person as resident of a country if they are liable to tax there by reason of domicile, residence or a similar criterion, and where someone is resident in both countries, the tie breaker looks in turn at where they have a permanent home available, their centre of vital interests, their habitual abode and their nationality. HMRC's PAYE Manual (PAYE81060) recognises that a Saudi resident may be unable to obtain a certificate of residence from the Saudi authorities, and explains that an individual can instead provide a statement on their residence status, explaining why they are recognised as resident under Saudi law, together with a copy of their residence permit (iqama), when making a treaty claim. ZATCA now also offers a tax residency certificate service, which individuals resident in the Kingdom for more than 183 days may be able to use, so it is worth checking whether a certificate can be obtained first. UK residence is decided separately under the UK Statutory Residence Test. Someone leaving the UK to work full time in Saudi Arabia may meet the automatic overseas test for full time work abroad if they work sufficient hours overseas, averaging 35 hours a week on HMRC's calculation, with no significant breaks from that work, spend fewer than 91 days in the UK in the tax year and work in the UK for more than three hours on fewer than 31 days, as our guide to the Statutory Residence Test and split year treatment explains.
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The taxes most expats notice day to day are indirect. VAT is charged at a standard rate of 15%, and excise tax applies to tobacco, soft drinks and energy drinks. A real estate transaction tax of 5% applies to the value of most disposals of real estate in Saudi Arabia, including some transfers of interests in property rich entities. The Law on Real Estate Ownership by Non-Saudis entered into force on 22 January 2026, allowing non-Saudi individuals and companies to own property in permitted areas subject to conditions, with Riyadh and Jeddah governed by geographic zones set by the Real Estate General Authority and ownership in Makkah and Madinah restricted to Saudi companies and Muslim individuals, so the current zones and conditions should be checked before any purchase. Social insurance contributions for non-Saudi employees are limited to occupational hazards cover, at 2% of contributory wage paid by the employer, so expats do not build a Saudi state pension in the way Saudi nationals do. Separately, the monthly fee charged for each dependant of an expat resident, and the levies charged to employers for expat workers, are government fees rather than taxes, but they can be a significant cost for families and are set by the authorities, so the current amounts should be checked. None of these change the UK position described below.
Because non-Saudi employees do not build a Saudi state pension, the end of service award under the Saudi Labour Law can be a material part of an expat employee's accumulated entitlements, although it is an employer obligation rather than a funded pension. Under Article 84, an employee whose contract ends is generally entitled to half a month's wage for each of the first five years of service and a full month's wage for each later year, based on the last wage and generally including allowances, subject to the statutory definition of wage and any agreed exclusions of variable pay, with part years counted pro rata. Under Article 85, an employee who resigns generally receives a third of the award after two to five years, two thirds after more than five but less than ten years, and the full award after ten years or more, with nothing for less than two years, subject to exceptions in the law and to the contract. The award is not taxed in Saudi Arabia. Whether it is taxed in the UK depends on your UK residence when it is paid and the nature of the payment, so if you are returning to the UK the timing should be checked, as our guide to returning to the UK after years abroad explains. Some employers also offer separate savings schemes. How the award and any other savings fit with your plans depends on your circumstances, and our guide to investing a lump sum as a British expat explains the UK points.
The UK and Saudi Arabia double taxation convention was signed on 31 October 2007, entered into force on 1 January 2009 and has had effect in the UK for income tax and capital gains tax from 6 April 2010, and it has been modified by the OECD Multilateral Instrument. Under Article 18, pensions and other similar remuneration paid to an individual who is a resident of one country are taxable only in that country, subject to the rules for government service pensions. Unlike some UK treaties, the article as published on GOV.UK does not contain a condition that the pension must actually be taxed in the country of residence. On that wording, a UK private or workplace pension paid to someone who is resident in Saudi Arabia for treaty purposes may be taxable only in Saudi Arabia, which does not generally tax it, but the outcome depends on treaty residence, the type of payment, the scheme and HMRC accepting a claim, and is not automatic. HMRC may ask for evidence, the rules can change and no tax outcome is guaranteed. In practice UK schemes deduct tax under PAYE until HMRC issues an NT code, so a claim is normally made on form DT-Individual with the residence statement described above. How HMRC treats lump sums and other pension payments under Article 18 should be confirmed before any payment is taken, as our guide to the tax-free lump sum when you live abroad explains. Under Article 19, UK government service pensions, for example many civil service and armed forces pensions, are generally taxable only in the UK, unless the individual is both resident in and a national of Saudi Arabia, and whether a pension counts as government service depends on the scheme. The UK State Pension can be paid to you in Saudi Arabia, but annual increases are paid only in the EEA, Gibraltar, Switzerland and certain countries with a social security agreement that provides for them, and Saudi Arabia is not one of them, so while you live there the pension is still paid but is generally not increased, staying at the rate payable when you moved there or first became entitled, if later. Our guide to drawing your UK pension while living abroad explains NT codes in more detail.
A transfer of a UK pension to a qualifying recognised overseas pension scheme (QROPS) on or after 30 October 2024 is subject to a 25% overseas transfer charge unless an exclusion applies, such as the member being tax resident in the same country in which the receiving scheme is established, the receiving scheme being an occupational pension scheme where the member is an employee of a sponsoring employer when the transfer is made, or certain international organisation and overseas public service schemes for their employees. On those rules, a Saudi resident transferring to a scheme established outside Saudi Arabia may be subject to the charge unless another exclusion applies, the receiving scheme's QROPS status needs checking at the transfer date, and a transfer generally cannot be reversed. The standard Overseas Transfer Allowance, £1,073,100 for 2026 to 2027 and different where certain protections apply, is tested separately, and the overseas transfer charge and the tax on transfers above the allowance are alternative charges, not cumulative ones, as our guide to the Overseas Transfer Allowance and the 25% charge explains. Whether keeping a UK pension, transferring it or taking benefits is appropriate depends on individual circumstances and needs regulated advice. For the UK State Pension, the option to pay voluntary Class 2 National Insurance contributions for periods abroad was removed from 6 April 2026, and new applications to pay voluntary Class 3 contributions for periods abroad generally require at least 10 years of continuous UK residence or 10 years of paid contributions, while contributions for earlier tax years may still be possible, so check your record on GOV.UK. From 6 April 2027, most unused pension funds and death benefits are legislated to come within UK inheritance tax, although death in service benefits from registered schemes and certain dependants' scheme pensions are excluded, as our guide to inheritance tax on pensions from April 2027 explains.
Moving to Saudi Arabia does not end UK tax on UK income. Under Article 6 of the treaty, UK rental income can be taxed in the UK, so rental profits remain within UK tax, and the Non-Resident Landlord Scheme may apply depending on how the letting is managed, as our guide to the Non-Resident Landlord Scheme explains. A sale of UK property or land is within UK capital gains tax for non-residents under UK law and Article 13 of the treaty, with a UK return generally due within 60 days of completion, even where no tax is due, as our guide to selling a UK property as a non-resident explains. Under Article 11, UK interest beneficially owned by a Saudi resident is taxable only in Saudi Arabia, and Article 10 allocates taxing rights over dividends, although the UK does not generally deduct withholding tax from dividends, depending on the investment and the payer. Gains on most other assets, such as shares and funds, are generally taxable only in the country of residence under Article 13, but paragraph 7 of the Protocol preserves the right of a country to tax gains of a person who was resident there in any of the previous six tax years. That means the UK temporary non-residence rules can still apply: broadly, if you had sole UK residence, meaning UK residence without being treated as resident elsewhere under a treaty, for the whole or part of at least four of the seven tax years before the year you left, and your period of non-residence is five years or less, certain gains and income realised while you were away can be taxed in the UK in the year you return, subject to detailed HMRC conditions. The treaty does not cover inheritance tax. Since 6 April 2025, UK inheritance tax on worldwide assets depends on long-term UK residence: broadly, someone UK resident for at least 10 of the previous 20 tax years, with that status continuing for between 3 and 10 tax years after leaving depending on residence history, and UK assets remain within UK inheritance tax regardless, subject to exemptions and reliefs. GOV.UK lists no UK inheritance tax treaty with Saudi Arabia. Succession to assets in Saudi Arabia can be affected by Saudi law, which draws on principles of Islamic law, with the outcome depending on factors such as the deceased's religion and nationality and the type and location of the assets, so wills covering assets in each country should be reviewed with specialist legal advice in each country, as our guide to using life insurance and trusts for GCC-based expats explains. Whether any change to how your income or assets are held is appropriate depends on your circumstances, and making no change may be the right outcome.
People moving to Saudi Arabia often hear that there is no income tax and stop there. For an employee that is broadly right on the Saudi side, but UK rent, UK property and government service pensions stay within UK tax, and any business activity in the Kingdom changes the picture. A qualified adviser or tax specialist would normally consider residence in each country for the year of the move. This is general information, not personal advice, and whether any action is appropriate depends on your circumstances.
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Saudi Arabia does not tax salaries, but UK rental income, UK property gains and UK government service pensions can remain within UK tax, and long-term UK residents can remain within UK inheritance tax for years after leaving.
A non-Saudi resident who carries on a commercial or professional activity in the Kingdom is subject to 20% income tax on the profit and must register and file with ZATCA.
Article 18 of the treaty generally gives the taxing right on private pensions to Saudi Arabia, but UK schemes deduct tax under PAYE until HMRC issues an NT code, so tax may need to be reclaimed.
Civil service, armed forces and some other public sector pensions are generally taxable only in the UK under Article 19, unless you are both resident in and a national of Saudi Arabia.
Voluntary Class 2 contributions for periods abroad ended from 6 April 2026, and new Class 3 applications for periods abroad generally need 10 years of UK residence or contributions.
The Protocol preserves the UK's right to tax gains of people who were UK resident in any of the previous six tax years, so the temporary non-residence rules can still apply if your period of non-residence is five years or less.
With UK pensions, the questions we hear from expats in Saudi Arabia are about tax on withdrawals and whether to transfer. The treaty can mean private pensions are taxed only in Saudi Arabia, depending on treaty residence, the type of payment and HMRC accepting a claim, but a transfer to an overseas scheme established in another country may be subject to the 25% overseas transfer charge unless an exclusion applies. Whether to keep, transfer or draw a pension depends on individual circumstances. This is general information, not a recommendation, and any decision needs individual advice.
Illustrative example only, not a real client. This example is simplified and fictional, applies the Saudi rules and the 2026 to 2027 UK rules described in this guide as stated assumptions, ignores currency movements and costs, and is not a guarantee of any outcome. It does not describe advice given to any client, does not represent the experience of actual clients and does not illustrate a recommended course of action. David and Claire are British and moved from Manchester to Riyadh in August 2026, where David has a five year contract with a Saudi employer. They kept a flat in Manchester which they now let, David has a UK workplace pension and a UK personal pension he may start drawing once he reaches the normal minimum pension age, which rises from 55 to 57 on 6 April 2028, and Claire has a deferred pension from her years as a civil servant. Claire is considering some freelance consultancy work for Saudi clients. They assumed that, as Saudi Arabia does not tax salaries, none of their income would be taxed anywhere.
In this fictional example, a hypothetical review by a regulated financial adviser, working alongside UK and Saudi tax specialists, would consider the following points on these assumptions. David's salary and end of service award would not be taxed in Saudi Arabia. Claire's freelance work could be a commercial activity within Saudi income tax at 20% on the profit, with registration requirements, so it would need Saudi tax advice before she started. The Manchester rent would remain taxable in the UK. David's private pensions would generally be taxable only in Saudi Arabia under Article 18 once he was Saudi resident for treaty purposes, but only after a DT-Individual claim with a residence statement and an NT code, while Claire's civil service pension, if confirmed as paid in respect of UK government service, would remain taxable only in the UK under Article 19. Their UK residence position in the year they left, their UK inheritance tax position, and the temporary non-residence rules if their period of non-residence lasted five years or less, would also need checking. No course of action is recommended.
Illustrative outcome only: this does not assess suitability or recommend any course of action, and no tax outcome, liability or saving is guaranteed. On these assumptions, the points that would need consideration include which of their income would remain taxable in the UK, whether Claire's consultancy would be taxed in Saudi Arabia, how and when a treaty claim for David's pensions would be made, and the effect of returning to the UK after five years or less of non-residence. Whether any change to their pensions or investments would be appropriate is a separate question needing its own suitability assessment and tax advice, and advice may conclude that no changes are suitable. Different facts, such as a shorter contract or keeping a UK home available, could produce a very different result.
Illustrative example, not a real client.
Clarity Global Wealth helps British expats living in Saudi Arabia, moving there or planning their next move understand how Saudi and UK tax rules could apply to their income, pensions, investments and estate before they act. Clarity Global Wealth is an introducer that provides information and introductions only, and does not itself give financial advice. We can arrange a free introduction to regulated financial planning with a separate regulated financial adviser; the introduction is an initial conversation, not advice, and places you under no obligation to proceed with advice or any product, so you can review your position with a regulated financial adviser where advice is appropriate. Any charges for advice would be explained to you before you proceed. The value of investments and pension funds can fall as well as rise, tax treatment depends on individual circumstances and can change, and advice may conclude that no changes are suitable. Clarity Global Wealth does not provide tax, legal or accounting advice, and adviser comments in this guide are general information, not personal recommendations. Saudi and UK tax returns, treaty claims and tax opinions are work for qualified tax specialists, so where that is needed we coordinate with them.
Related guides: Becoming a Tax Resident in the UAE, Oman Income Tax for Expats, Moving From the UK: The Statutory Residence Test, Drawing Your UK Pension While Living Abroad, The Overseas Transfer Allowance and the 25% Charge, The Non-Resident Landlord Scheme, Inheritance Tax on Pensions from April 2027 and Returning to the UK After Years Abroad.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
Not on salaries. Saudi Arabia does not tax individuals on employment income or end of service awards. A non-Saudi resident who carries on a business or commercial activity in the Kingdom is taxed at 20% on the net profit, and zakat applies to Saudi and GCC nationals rather than other expats.
Under Article 3 of the Income Tax Law, a person is resident for a tax year if they have a permanent place of residence in Saudi Arabia and are present for at least 30 days in the year, or if they are present for at least 183 days. Treaty residence and UK residence are decided separately.
Under Article 18 of the UK and Saudi Arabia treaty, UK private and workplace pensions paid to a Saudi resident are generally taxable only in Saudi Arabia, which does not generally tax them, provided HMRC accepts a claim and issues an NT code. The outcome depends on treaty residence, the type of payment and the scheme, and is not guaranteed. UK government service pensions are generally taxable only in the UK under Article 19.
ZATCA offers a tax residency certificate service that individuals resident for more than 183 days may be able to use. HMRC's PAYE Manual also recognises that some Saudi residents may be unable to obtain a certificate, and says an individual can instead provide a statement explaining why they are resident under Saudi law, with a copy of their residence permit, alongside the DT-Individual claim form.
Generally yes, in the sense that it is not increased. The State Pension can still be paid in Saudi Arabia, but annual increases are paid only in the EEA, Gibraltar, Switzerland and certain countries with a social security agreement that provides for them, and Saudi Arabia is not one of them.
Yes. The treaty allows the UK to tax income from UK property, so UK rental profits remain within UK tax and the Non-Resident Landlord Scheme may apply. Gains on UK property are also within UK tax, with a return generally due within 60 days of completion.
Saudi Arabia does not levy a personal inheritance or estate tax, but succession to assets in Saudi Arabia can be affected by Saudi law, depending on factors such as religion, nationality and the type of asset, so local legal advice is needed. UK inheritance tax can continue to apply to long-term UK residents for up to 10 tax years after leaving, and to UK assets regardless.
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