Taxation & VAT in Saudi Arabia Saudi Arabia has emerged as one of the most attractive destinations for foreign investors, thanks to its strategic location, rapidly growing economy, and pro-business reforms. However, before setting up operations in the Kingdom, it is crucial to understand the Saudi tax framework to ensure compliance and effective financial planning. Overview of the Saudi Tax System Foreign companies operating in Saudi Arabia are subject to several fiscal obligations, including corporate income tax, Zakat, and Value-Added Tax (VAT), in addition to other financial levies depending on the nature of their business.Understanding these obligations in advance helps businesses manage liabilities, avoid penalties, and maintain profitability. 1. Corporate Tax in Saudi Arabia Saudi Arabia imposes a 20% corporate income tax (CIT) on the