6% tax ON EXPAT REMITTANCE

Expat Remittance Tax

A proposed tax on expat remittance could become a reality very soon. The Shoura Council’s finance committee is given the green light on a proposed tax on the remittances of expats. Under the new plan which will start at 6 percent in the first year and gradually settle at 2 percent permanently from the fifth year onward.

If you send 10,000 SAR to your home country you will have to pay 600 SAR as tax! Ouch!

Hossam Al-Anqari, head of the General Auditing Bureau and former member of the Shoura, proposed the tax saying that this would force expats to invest in Saudi Arabia. This proposed bill may be introduced soon. The tax would be on all money transfers by expats, according to a media report on Thursday.

Limits to be set on Expat Remittance

In addition, to the remittance tax the government will also be limiting the amount of money an expat can send abroad. Lastly, if an expat were leaving on final exit even he would have a limit in terms of the amount that he could remit to his home country. For expats leaving the country, their end of service benefits would be calculated and would provide a baseline for their final remittance.

For instance if your EoSB total 200,000 SAR, the government would limit your final remittance close to that amount. Currently, expats can transfer money without verification of where the money came from. If this bill is to implemented, expats must be allowed more opportunities to invest in the Kingdom. Currently, expats are limited to buying property which they must sell at the time of final exit. This tax should be implemented after the Saudi Green Card has been launched.