Effective 1 July 2017 Saudi Arabia has implemented an Expat levy which is currently applicable to dependants and will be extended to employees from next year if the company they work for hires more foreign nationals than Saudi nationals.
Further to our client alert released in January 2017 as part of the Budget for 2017, Saudi Arabia have now implemented a monthly levy on sponsoring foreign nationals. This levy, which pertains to both employees and their dependants, will gradually increase over a period of four years. The fee is payable in advance of issuing a new Exit/Re-Entry Permit or Iqama (residence permit).
The changes are as follows:
The proposed changes are in line with the country’s vision to diversify its sources of income as well as measures to improve the representation of Saudi nationals in the private sector.
Although similar levies (for employees only) are already in place, currently companies that employ more Saudi nationals compared to foreign nationals are exempt from the levy rather than being subject to a discounted rate as the new rules propose.
Tax and Legal Services Leader, PwC Middle East
Tel: +971 (0)4 304 3100
Legal Market Leader, PwC Legal Middle East
Tel: +971 4 304 3424
Immigration Leader, PwC Legal Middle East
Tel: +971 (0) 4 304 3922