Tax Types and Rates in UAE vs Saudi Arabia (KSA): Complete 2026 Guide

Expanding or setting up a business in the UAE or Saudi Arabia (KSA)? One of the most critical factors founders and investors must understand is taxation. While both countries are business-friendly, their tax structures, rates, and compliance requirements differ significantly. This guide breaks down the key tax types and rates in the UAE and KSA, helping you make an informed decision before entering either market.

UAE vs Saudi Arabia Tax System

The UAE is known for its low-tax environment, while Saudi Arabia applies higher corporate and withholding taxes, especially for foreign-owned businesses. Understanding these differences can directly impact your profitability, pricing strategy, and long-term growth.

UAE & KSA Tax Rates

The UAE applies a 9% corporate tax on taxable profits above AED 375,000, with 0% withholding tax, 5% VAT, and no separate capital gains tax for most business activities. This makes the UAE one of the most tax-efficient jurisdictions for regional and international businesses.

Saudi Arabia, on the other hand, imposes a 20% corporate income tax on foreign-owned entities, 5%–20% withholding tax, and a higher 15% VAT. Additional taxes such as capital gains tax and real estate transaction tax may also apply depending on the business activity.

Choosing the right market depends on your business goals, ownership structure, and growth strategy. Proper tax planning can help reduce costs, ensure compliance, and support sustainable expansion in the UAE or KSA.

For professional guidance on business setup and tax compliance in the UAE or Saudi Arabia, consult experienced advisors to structure your business efficiently.

800244