Tax treaty Netherlands - Saudi Arabia enters into force
1 December 2010
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
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