01 December 2010 Add expertise tag Add service tag Add country tag
Corporate Tax Services VAT advice & compliance Company Formation Services Accounting & Corporate Secretarial Services Payroll & HR services Global Mobility Services Corporate compliance Transfer Pricing Services Corporate Structuring Transfer Pricing International Tax Planning Mergers & Acquisitions International labor and cross border assignments Saudi Arabia

The tax treaty between Saudi Arabia and The Netherlands which was signed on 13 October 2008 enters into force as per 1 December 2010.

The withholding tax rates in the treaty are as follows. 

  • The withholding tax on dividends is 10%. If the beneficial owner has more than 10% shares in the dividend distributing company then the withholding tax is reduced to 5%.
  • The withholding tax on interest is 5%.
  • The withholding tax on royalty’s is 7%.

Capital gains on shares could be taxed in the State where the company is located unless the beneficial owner has at least 10% of the shares in the company. Capital gains on shares and dividends in the hands of individuals can still be taxed in The Netherlands after emigration for a period of 10 years.

In the treaty it is also mentioned that companies that are not subject to tax in Saudi Arabia for a limited period of time not exceeding ten years from tax on income in Saudi Arabia under the provisions of encouragement of its investment still meet the subject to tax test for Dutch participation exemption purposes.