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Moving from Saudi Arabia Tax Guide 2026: No Income Tax, GOSI Withdrawal, Gratuity & End of Service

Quick Answer: Saudi Arabia imposes no personal income tax on individuals — a key reason the Kingdom attracts millions of expatriates. There is no exit tax on departure. Your main departure considerations are: End of Service Benefit (EOSB) gratuity — mandatory for all workers, paid by the employer as a lump sum on departure; GOSI social insurance — expats contribute but cannot claim a pension, though a partial refund may apply; and Iqama (residency permit) cancellation. For business owners: Zakat on Saudi company interests and ZATCA tax clearance.
By Daniel, founder of CountryTaxCalc.com

Last Updated: April 2026

Key Facts

Saudi Arabia's Tax-Free Environment for Individuals
Personal income tax: Saudi Arabia does not impose income tax on individuals' employment income, investment income, or capital gains. This applies to both Saudi nationals and expatriates. There is no progressive income tax scale, no withholding on wages, and no annual individual income tax return. Social insurance: GOSI (General Organisation for Social Insurance) contributions are mandatory for employees. Expatriate contribution: 2% of gross salary (or higher for hazardous work). Saudi national employee: 9.75%; employer: additional contributions. VAT: Saudi Arabia imposes 15% VAT (introduced 2018, increased from 5% to 15% in 2020) on goods and services. VAT is a consumption tax — not an income tax. Withholding tax: Saudi Arabia applies withholding tax on payments to non-resident entities (not individuals) — 5%–20% on various categories (royalties, services, dividends from Saudi companies). This is a corporate/business tax matter, not personal income tax. Corporate Income Tax: 20% CIT on foreign entities' income from Saudi sources. Saudi nationals: subject to Zakat (2.5% on business income and net assets), not CIT. Mixed entities (Saudi/foreign ownership): Zakat on the Saudi portion, CIT on the foreign portion. No capital gains tax for individuals on shares, real estate, or other assets — a uniquely favourable environment for wealth accumulation.
End of Service Benefit (EOSB): Saudi Gratuity on Departure
The End of Service Benefit (EOSB — مكافأة نهاية الخدمة) is a mandatory severance/gratuity payment under Saudi Labour Law (Article 84). All employees working in Saudi Arabia (Saudi and expat) are entitled to EOSB on departure. Calculation: (1) If you resign (voluntary departure): entitled to EOSB if you worked for 2+ years. Entitlement: 1/3 of one month's salary for each of the first 5 years; 2/3 of one month's salary per year for years 5–10; full one month's salary for each year above 10. (2) If the employer terminates: full entitlement from day one of employment: 0.5 month's salary for each of first 5 years; 1 month's salary for each year above 5 years. Example: 5 years worked, resigned, final salary SAR 30,000/month: EOSB = (SAR 10,000 × 5 years × 1/3) ≈ SAR 50,000. Saudi EOSB tax in KSA: NOT subject to Saudi income tax — Saudi Arabia does not tax EOSB receipts. Destination country taxation: CRITICAL — the EOSB is taxable in most destination countries as employment income or retirement benefit. UK: EOSB taxable as emoluments (all earnings from employment); first £30,000 exemption may apply for termination payments, but only under specific conditions. USA: EOSB taxable on Form 1040 as foreign employment income. Australia: EOSB taxed as ordinary income (no concessional tax rate unless it qualifies as ETP — Employment Termination Payment — under ATO rules). Always plan for destination country tax on EOSB before departure.
GOSI (General Organisation for Social Insurance) for Expats
GOSI (المؤسسة العامة للتأمينات الاجتماعية) covers occupational hazards and workplace injury insurance for both Saudi nationals and expatriates. For expatriates: contribution: 2% of insured salary (employee + employer combined for occupational hazard branch). GOSI for expats covers: work injury (إصابة العمل) and occupational disease compensation only. Expats do NOT contribute to or benefit from the retirement and social insurance branches (التقاعد والتأمينات) — these are only for Saudi nationals. Saudi GOSI pension: Saudi nationals contribute at 22% of salary (employee 9.75% + employer 12.25%) to the retirement branch — building a Saudi state pension. Expat GOSI refund on departure: For occupational hazard contributions — the employer bears most of this contribution; there is no individual expat GOSI balance to 'withdraw' in the same way as EPF (Malaysia) or BHXH (Vietnam). There is no accumulated individual expat retirement account in GOSI. Expats do not receive a GOSI refund on departure in the conventional sense. If there were any GOSI administrative errors or overpayments: the employer must rectify these at end of contract. Saudi GOSI certificate: on departure, some destination countries' pension authorities require a GOSI certificate of contributions to confirm which social security system applied — obtain from your Saudi employer or GOSI directly.
Iqama Cancellation and Departure Procedures
Iqama (إقامة — Residency Permit): the formal Saudi residency documentation for all expatriates. Cancellation: your employer (the Kafeel — sponsor under the old Kafala system, now transitioning to the new Saudi labour reform) cancels the Iqama through the Absher portal (Saudi government digital platform). Steps: (1) Employer submits Iqama cancellation on Absher — the employee receives an Exit Visa (or Final Exit Visa). (2) Exit visa types: Single Exit Visa (السفر للخارج) for temporary departure; Final Exit Visa (الخروج النهائي) for permanent departure and Iqama cancellation. (3) Final Exit Visa: once issued and used to depart, the Iqama is permanently cancelled. You cannot re-enter Saudi Arabia on the same Iqama. (4) Clearances required before Iqama cancellation: no outstanding debt with employer; no outstanding loans with Saudi banks; no criminal cases pending (Kharooj Nehai — clearance from courts); no traffic fines or government fines. Absher digital check: the Absher portal aggregates outstanding obligations — resolve all before requesting cancellation. Saudi Premium Residency (الإقامة المميزة — Saudi Green Card): holders of Saudi Premium Residency have different exit rules — they can depart and re-enter Saudi Arabia without Kafeel sponsorship requirements. Premium Residency requires formal cancellation if permanently departing. ZATCA (Tax Authority): for employees (not business owners): no ZATCA filing required on departure. For business owners with CIT obligations: ZATCA clearance required.
Saudi Business Owners: Zakat and ZATCA on Departure
Zakat (زكاة): all Saudi-national-owned or Saudi company interests are subject to Zakat (2.5% on Zakatable base). Foreign shareholder portion: subject to CIT (20% corporate income tax) administered by ZATCA. ZATCA (Zakat, Tax and Customs Authority — هيئة الزكاة والضريبة والجمارك): administers Zakat, CIT, withholding tax, and VAT. For departing foreign investors with Saudi company interests: (1) File all outstanding Zakat/CIT returns with ZATCA. (2) Obtain a ZATCA tax clearance certificate (شهادة الإخلاء الضريبي) — required for: transferring Saudi company shares; dissolving a Saudi entity; exiting a business partnership. (3) VAT deregistration: if you operated a Saudi VAT-registered business, apply for VAT deregistration with ZATCA before or on the date of departure. (4) E-invoicing (FATOORAH): Saudi Arabia's phased e-invoicing system applies to VAT-registered entities. Ensure all outstanding invoicing obligations are met before deregistration. Transfer of Saudi company ownership: subject to SAGIA (Saudi Arabian General Investment Authority, now MISA — Ministry of Investment) approval for foreign-owned entities. The transfer process requires ZATCA clearance and MISA licensing updates. Saudi Stock Exchange (Tadawul) investments: non-resident investors can hold Saudi equities via the Qualified Foreign Investor (QFI) programme — you can retain Tadawul investments after departure. Capital gains on Saudi stocks: no Saudi CGT for individuals.

Saudi Arabia is home to over 10 million expatriates drawn by the combination of zero income tax, high salaries, and a rapidly modernising economy under Vision 2030. Departure from Saudi Arabia is relatively straightforward from a tax perspective — there is simply no personal income tax system to navigate. However, the End of Service Benefit (EOSB), GOSI social insurance, and the tax implications in your destination country (where the EOSB may be fully taxable) require careful planning. Saudi business owners face Zakat obligations and ZATCA clearance requirements.

Moving from Saudi Arabia to the UK, USA, or Australia

Key destination-country tax implications for the most common departure routes:

UK: Upon establishing UK tax residency: your EOSB payment is taxable as employment income. The £30,000 termination payment exemption may apply if the EOSB is a genuine termination payment — not if it is contractual enhanced severance. Arrears of salary or contractual bonuses: fully taxable in the UK regardless of when received. Saudi bank interest: 0% Saudi withholding; taxable in UK at up to 45% marginal rate (save-and-invest into ISA after returning to UK). Saudi property: UK CGT does not apply to Saudi real estate gains (Saudi Arabia would have the primary taxing right under a UK-Saudi DTA if one exists — no comprehensive UK-Saudi income tax treaty as of 2026).

USA: Saudi EOSB and gratuity fully taxable on Form 1040. FBAR: Saudi bank accounts (SAR or otherwise) reportable on FinCEN 114 if aggregate >$10,000. FBAR deadline: April 15 (with automatic extension to October 15). Saudi Aramco shares (if awarded): report on Form 3520 if held in trust structure; capital gains fully US-taxable.

Australia: ATO treats EOSB as assessable income. Employment Termination Payment (ETP) concessional rate may apply (up to $235,000 at 15% or 30% depending on age and type — ETP cap applies). Seek ATO ruling on EOSB classification as ETP. Saudi bank accounts: reportable under ATO foreign income reporting obligations.

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Frequently Asked Questions

Q: Is my Saudi EOSB gratuity taxable in my home country?

Yes — almost universally. Although Saudi Arabia imposes no tax on the EOSB payment, your destination country will generally tax it as income in the year received (or the year you establish tax residency in that country). Country-by-country: UK: taxable as employment earnings; £30,000 termination exemption may apply if the EOSB qualifies as a genuine ex-gratia termination payment rather than a contractual entitlement — HMRC makes a factual determination. Most Saudi EOSB (which is a statutory entitlement) does NOT qualify for the £30,000 exemption — it is contractual/statutory, not ex-gratia. Australia: assessable income; potentially qualifies as Employment Termination Payment (ETP) at concessional rates — seek ATO advice on classification. USA: fully taxable as ordinary income on Form 1040. Canada: taxable as employment income; retiring allowance rules may allow RRSP contribution of limited amounts. Germany: taxable as income; potential 1/5 rule (Fünftelregelung) averaging concession for multi-year lump sums — may reduce effective German tax rate. France: taxable as salaires; indemnité de licenciement partial exemption may apply if the EOSB was involuntary termination — not for voluntary resignation. Key planning point: if possible, receive your EOSB while still a Saudi tax resident (no Saudi tax) and BEFORE establishing tax residency in the high-tax destination — the timing of when you establish new tax residency relative to when the EOSB is paid is critical.

Q: What do I do with my Saudi bank account when I leave?

Saudi bank accounts (SAR and FX accounts at Saudi National Bank, Al Rajhi Bank, Riyad Bank, etc.) can be managed after departure: (1) Option 1 — Keep open as non-resident: Saudi banks allow non-residents to maintain accounts. The bank may require updated identification (passport) and foreign address — provide via the bank's branch or digital banking platform. Useful if you expect future Saudi income (Tadawul dividends, property rental, delayed EOSB instalments). (2) Option 2 — Close and transfer: close the account and transfer proceeds internationally. For SAR (Saudi Riyal) transfers: SAR is pegged to USD at 3.75 — there is no exchange rate risk (unlike TRY or VND). International SAR transfers: Saudi banks (SARIE system domestically; SWIFT internationally) handle outbound transfers. For transfers above $10,000 equivalent: documentation of source of funds required. Wise: Wise supports SAR to GBP, EUR, AUD, USD at competitive rates for smaller transfers. For larger Saudi-to-abroad transfers: Saudi bank's international wire service or specialist FX brokers (Moneycorp, OFX) may offer better rates at scale. FATF reporting: Saudi Arabia participates in FATF (Financial Action Task Force) anti-money laundering standards. Large transfers from Saudi accounts internationally require documentation — salary slips, EOSB calculation, property sale documents as appropriate. IBAN format: Saudi bank accounts use SA-prefix IBANs (24 characters).

Q: What happens to my Saudi investments and Tadawul holdings after I leave?

Saudi Stock Exchange (Tadawul/Saudi Exchange) investments: (1) Qualified Foreign Investor (QFI) status: non-residents can hold Saudi equities directly via the QFI programme administered by the Capital Market Authority (CMA). You can register as a QFI to continue holding Saudi stocks as a non-resident. (2) No Saudi CGT: Saudi Arabia imposes no capital gains tax on individuals for stock transactions — sales of Saudi equities are tax-free in Saudi Arabia. (3) Destination country CGT: your new country of residence will impose capital gains tax on Saudi stock gains. UK: 18%/24% CGT; USA: 15%/20%; Germany: 25% Abgeltungsteuer; Australia: 50% CGT discount for 12-month+ holdings. (4) Dividends from Saudi stocks: Saudi company dividends paid to non-residents — subject to 5% Saudi withholding (per ZATCA domestic rates — check DTA if applicable). Credit this in your new country. (5) Saudi REITs (Real Estate Investment Trusts traded on Tadawul): non-residents can hold Saudi REITs via QFI. Saudi REIT dividends: 0% withholding for REITs under current Saudi rules. (6) Saudi bonds (sukuk): held via Tadawul or directly. Non-resident sukuk interest/returns: 5% withholding at source (ZATCA). (7) Broker: maintain your relationship with your Saudi broker (Al Rajhi Capital, SNB Capital, Riyad Capital, etc.) or switch to an international broker that supports Saudi market access.

Q: I own shares in a Saudi company — what ZATCA obligations do I have when I leave?

If you own shares in a Saudi company (limited liability company — LLC/شركة ذات مسؤولية محدودة, or joint stock company — JSC/شركة مساهمة): (1) CIT obligations: as a foreign shareholder, your share of the company's profits is subject to 20% Saudi CIT. This is levied at the company level — the company files CIT returns with ZATCA. Your personal departure does not change the company's ongoing CIT obligations. (2) Selling Saudi company shares on departure: the gain on sale of Saudi company shares by a non-resident is subject to Saudi withholding tax under ZATCA rules. The buyer withholds on the gain. Obtain a ZATCA tax clearance before the transfer. (3) Zakat: the Saudi national portion of the company's Zakatable base pays Zakat at 2.5%. If you are a foreign shareholder: the foreign portion pays CIT (not Zakat). Mixed ownership: apportion accordingly. (4) ZATCA clearance: apply for a tax clearance certificate (شهادة الإخلاء الضريبي) from ZATCA — required to transfer shares, dissolve the company, or exit a partnership. ZATCA reviews all outstanding CIT, Zakat, withholding, and VAT obligations. (5) MISA (Ministry of Investment): foreign investment licences require MISA notification of shareholder changes. Apply for MISA approval of share transfer before completing the exit. (6) Electronic invoicing continuity: if the company is Fatoorah (e-invoicing) compliant, ensure the system remains operational post-departure — the company continues as a Saudi entity regardless of the shareholder's residence.

Disclaimer: This guide provides general tax information for educational purposes only. Saudi Arabia's labour law (EOSB), GOSI regulations, ZATCA rules, and Iqama procedures change with Saudi government decrees and ministerial circulars. Destination-country taxation of EOSB varies significantly by jurisdiction. Nothing in this guide constitutes tax or legal advice. Consult a Saudi-licensed legal or financial adviser and a tax adviser in your destination country before departing Saudi Arabia.

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