Preparation of Withholding Tax Certificates

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Preparation of Withholding Tax Certificates in Saudi Arabia

Simplify Your International Payments and Stay Fully Compliant

Handling payments to overseas vendors can be tricky, but obtaining your withholding tax certificate doesn’t have to be. Eighty20 Business and Financial Solutions makes it easy for Saudi businesses to calculate, file, and secure official ZATCA certificates quickly. Focus on growing your business while we ensure your cross-border payments meet every legal requirement.

What Is a Withholding Tax Certificate?

A withholding tax (WHT) is a tax that Saudi businesses must deduct from payments made to foreign companies or individuals without a permanent establishment in Saudi Arabia. When your company pays a service provider abroad, a portion of that payment is withheld as tax and remitted to the Saudi government.

The withholding tax certificate is an official ZATCA document confirming that the tax has been paid. This certificate is important for several reasons:

It proves compliance with Saudi tax law
It helps the foreign payee avoid double taxation by providing proof of tax withheld
It supports reduced tax rates under Saudi Arabia’s Double Taxation Agreements (DTAs)

Key Facts About Withholding Tax in Saudi Arabia

Saudi law (Article 68 of the Income Tax Law) requires withholding tax on payments from Saudi sources to non-residents unless specifically exempted.

Who pays WHT:

The Saudi company or individual making the payment is responsible
The foreign recipient does not pay directly

Taxable payments include:

Technical and consulting services
Management fees
Royalties and intellectual property usage
Dividends
Interest on loans
Rental payments

WHT rates:

5%
15%
20%
(depending on payment type and ZATCA rules)

Exemptions:

Very limited
Certain industries such as oil, gas, hydrocarbons
Payments covered under Double Taxation Agreements (DTAs)

How Withholding Tax Works in Saudi Arabia

We manage the full process step by step:

Deduct the tax from payment
We calculate and withhold the correct WHT amount as per Saudi law.
Pay the withheld tax to ZATCA
Payment is made by the 10th of the following month. We prepare and submit the payment voucher.
File the monthly WHT return
We complete and submit all required ZATCA forms on your behalf.
Obtain the WHT certificate
After filing, ZATCA issues the official certificate. We retrieve it for you.
Provide certificate to foreign payee
We ensure your overseas partner receives it for tax credit or treaty benefits.

Our Withholding Tax Certificate Services in Saudi Arabia

Expert guidance
We stay updated with ZATCA rules, WHT rates, exemptions, and compliance requirements.

Complete documentation support
We prepare all returns, payment vouchers, and certificates and maintain proper records.

Timely filing
We manage deadlines to avoid penalties and late submission issues.

Tax treaty optimization
We help apply Double Taxation Agreements where eligible to reduce or eliminate WHT legally.

Consultation and support
We explain every step clearly and help you make correct compliance decisions.

Our Pricing Structure

Our services start from SAR 1,000. Final pricing depends on:

Volume of transactions
Complexity of payments
Documentation requirements

A clear quote is provided after reviewing your case.

Why Choose Eighty20 Business and Financial Solutions?

End-to-end withholding tax management
Full compliance with Saudi tax regulations
Reduced risk of penalties and errors
Clear communication without technical complexity
Efficient handling of ZATCA processes
Reliable support for international transactions

We manage the compliance so you can focus on your business.

Get Your Withholding Tax Certificates the Smart Way

Avoid penalties, save time, and stay fully compliant.

Contact Eighty20 Business and Financial Solutions today to obtain your withholding tax certificates quickly and correctly.

FAQ's

How fast can I get a withholding tax certificate in Saudi Arabia?

Yes, it can. Withholding tax in KSA is based on the source of income, not just the service location. If the service benefits a Saudi business or is linked to Saudi operations, ZATCA may still treat it as Saudi-sourced income. Even if the consultant or supplier works from another country, the payment may still require withholding tax if the economic benefit is in Saudi Arabia.

Can a foreign company claim a refund if too much tax was withheld?

Yes. Some contracts include different types of services in one invoice, such as consulting, licensing, and management services. Each part may fall under a different WHT category and rate. In these cases, the payment must be split by service type, and each portion taxed separately. This is often missed and can cause serious compliance issues if handled incorrectly.

Are digital certificates accepted by foreign tax authorities?

Even if a contract does not mention withholding tax, Saudi tax law still applies. Legal tax obligations override contract wording. This means your company may still be required to withhold tax. Many businesses only realize this after ZATCA reviews transactions. This is why payment reviews before execution are critical.

What if my company makes multiple cross-border payments in a month?

In many cases, yes. If reimbursements are part of a service agreement and not supported by direct third-party invoices in the Saudi company’s name, ZATCA may treat them as taxable income. Improper structuring of reimbursements is a common compliance risk area that requires careful review.

Do WHT rules change depending on the type of service provided?

Yes. If withholding tax is not addressed during contract negotiation, it can change the real cost of services. Some foreign suppliers expect net payments, which shifts the tax burden to the Saudi company. Proper tax structuring at the contract stage helps avoid pricing disputes, unexpected cost increases, and legal conflicts later.

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