Saudi Arabia Eyes Remittance Tax

December 22, 2016 Taxation in Saudi Arabia

Two FivesRIYADH – Saudi Arabia wants to cash in on the country’s expansive remittance market with a tax on residents sending money overseas.

On December 21st the Shura Council of Saudi Arabia debated a proposal to implement a tax on remittance of money out of Saudi Arabia by non-residents.

The proposed tax would see outward remittance taxed at a rate of 6 percent, if the individual ordering the transfer has been in Saudi Arabia for one year or less.

By the time that the individual has been residing in Saudi Arabia for 5 years, the tax would be dropped to a rate of 2 percent.

It is estimated that Saudi Arabia currently has the second highest volume of outward remittance in the world, with only the USA seeing more transfers.

The consideration of the new tax is a product of the attempts by the government of Saudi Arabia to reduce its reliance on revenues from oils.