1Issue 2 | May 2026

Persons Subject to Income Tax in the Kingdom Pursuant to Article 2 of the Law, the following persons are subject to tax: 1. A resident capital company, with respect to the shares owned directly or indirectly by non-Saudi persons, as well as the shares owned directly or indirectly by persons engaged in the production of oil and hydrocarbons. This excludes shares owned directly or indirectly by persons engaged in the production of oil and hydrocarbons in capital companies listed on the Saudi financial market, as well as shares owned directly or indirectly by such companies in capital companies. Capital companies include joint stock companies, limited liability companies, and partnerships limited by shares, and investment funds are deemed capital companies for the purposes of the Income Tax Law. Shares in such companies are subject to tax if they are owned directly or indirectly by non-Saudi persons, as well as shares owned by Saudis or non-Saudis in capital companies operating in the field of oil and hydrocarbon production, with one exception: where such company is listed on the Saudi financial market (Tadawul). 2. A non-Saudi resident natural person who carries out an activity in the Kingdom. Any resident natural person who does not hold Saudi citizenship and who derives income from a source in the Kingdom, and who carries out, in the same period, a commercial, professional, vocational, or any other activity with the intent of generating profit, shall be subject to Income Tax in accordance with the provisions of the Law. 3. A non-resident person who carries out an activity in the Kingdom through a Permanent Establishment. Any person, whether Saudi or non-Saudi, in accordance with Article 1 of the Regulations, and whether natural or legal, who is not resident in the Kingdom and who carries out a commercial activity therein through a Permanent Establishment (as further clarified in Section 2.4 of this Guideline), or who has derived income from a source in the Kingdom, shall be subject to tax. 4. A non-resident person who derives taxable income from sources in the Kingdom without having a Permanent Establishment therein. Any person shall be subject to tax if they derive specific income from a source in the Kingdom, even if they are not resident therein and do not have a Permanent Establishment in the Kingdom. 5. A person engaged in the investment of natural gas. 6. A person engaged in the production of oil and hydrocarbons.