Saudi Arabia’s Ministry of Finance has moved to deny rumours that the country will impose taxes on remittances by expatriate workers.
RELATED: Not worried about tax? Click here to compare KSA’s best credit cards!
A statement posted to Saudi Press Agency stated that the ministry, “categorically denies [the rumours] and affirms its commitment to support the free movement of capital through official channels in accordance with best international standards and practices”.
Although the rumours have seemingly been quashed, their existence is perhaps not surprising. Saudi Arabia is now firmly committed to ‘Saudisation’, replacing expatriate workers with Saudi nationals in a growing number of industry sectors.
Around 800,000 foreign residents left Saudi Arabia between the beginning of 2017 and the end of Q1, 2018. Their departure coincides with the imposition of new levies on expatriate workers and their dependents.
Despite Saudisation and the fall in the number of expatriate workers, foreigners working in Saudi Arabia still repatriate huge sums of money. Around SR 32 billion was remitted in the first quarter of 2018, down from around SR 34 billion in the fourth quarter of 2017.
It’s perhaps worth mentioning that Saudi Arabia does now charge VAT on the fees that exchange houses charge for sending money. Whilst this fee varies, it would rarely come to more than SR 27 per transaction, hence you’d be hit for around SR 1.35 in VAT.
Perhaps of more concern to expatriates should be the exchange rates money houses offer on transfers, which can be between 1.6% and 4.9% lower than official rates.