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June 26, 2026

This official tax circular (Second Edition, May 2026) issued by the Zakat, Tax and Customs Authority (ZATCA) clarifies the application of withholding tax provisions under the Saudi Arabian Income Tax Law and its Implementing Regulations. It outlines general residency criteria for withholding obligations and provides detailed regulatory treatments and practical examples for specific categories of non-resident income, including loan charges (such as repo agreements and syndicated loans), dividend distributions from resident capital companies and foreign branches, and returns on equity and debt securities.

Guideline to Clarify the Provisions of Tax Withholding for Certain Types of Income in Accordance with the Income Tax Law

Zakat, Tax and Customs Authority

Second Edition | May 2026

1. Introduction

2. General Provisions Regarding Tax Withholding

3. Guideline Regarding the Application of Tax Withholding to Specific Payments

3.1 Loan Charges
1. 3.1.1 Definition and Scope of Application of Tax Withholding
2. 3.1.2 Practical Examples
3.2 Income from Resident Capital Companies
1. 3.2.1 Definition and Scope of Application of Tax Withholding
2. 3.2.2 Practical Examples
3.3 Returns on Securities
1. 3.3.1 Definition and Scope of Tax Withholding Application

The Zakat, Tax and Customs Authority (ZATCA) has issued this Tax Circular to clarify certain treatments related to the application of the regulatory provisions in force as at the date of its issuance. The content of this Circular does not constitute an amendment to any of the provisions of the applicable rules and regulations in the Kingdom.

The Authority affirms that it shall apply the explanatory treatments set out in this Circular, where applicable, considering the relevant statutory provisions. If any clarification or content incorporated in the Circular is amended in relation to an unchanged statutory provision, the updated explanatory treatment shall apply to transactions carried out after the publication date of the updated version of the Circular on the Authority's website.

Note: The English version is for guidance purposes only. In case of any discrepancy between the Arabic and English versions, the Arabic version shall prevail.

Amendment Log

#	Edition No.	Amendment Date	Section/Item	Amendment Type	Amendment Description	Remarks
-	-	-	-	-	-	-

Introduction

The Zakat, Tax and Customs Authority ("ZATCA" or "Authority") publishes this Guideline to provide the necessary clarifications and instructions for applying the provisions related to Tax withholding contained in the Income Tax Law ("Law") and its Implementing Regulations ("Regulations") in specific cases.

This Guideline is based on the Income Tax Law and its Implementing Regulations in force on the date of its publication and the Authority's interpretation thereof. It aims to reduce ambiguity and confusion faced by the taxpayer from whom Tax is withheld from the amount paid to them, or who is obligated to withhold the Tax.

Contents

Amendment Log

Introduction

General Provisions Regarding Tax Withholding