India-Saudi Arabia DTAA
Treaty signed: January 25, 2006 | Effective from: December 8, 2006
● Live · Rates served from /api/tax-rules/dtaa/SA
Dividends
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Interest
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Royalties
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Capital Gains
Fees for Technical Services
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Key Treaty Provisions
- Saudi Arabia has no personal income tax on individuals - treaty primarily helps Indian companies operating in Saudi Arabia and Saudi entities investing in India
- Dividends: 5% for substantial shareholding (≥10%) - useful for Indian subsidiaries remitting to Saudi parent
- Large Indian workforce in Saudi Arabia (around 2.5 million Indians) - their Saudi salaries are not taxable in India if they qualify as NRIs
- Zakat (religious tax) is not considered income tax under the DTAA
- Saudi Arabia has not ratified MLI as of 2025
Frequently Asked Questions
Is salary earned in Saudi Arabia by an Indian NRI taxable in India?▾
No. Saudi Arabia does not impose income tax on individual workers. India does not tax it either if the individual qualifies as an NRI. Only if you become a Resident of India (return to India and spend 182+ days) does your Saudi-earned income during your India-resident year become taxable.
What dividend withholding applies when an Indian subsidiary pays dividend to its Saudi parent?▾
Under the India-Saudi Arabia DTAA, dividends are taxable at 5% if the Saudi company holds at least 10% of the Indian company's capital, and 10% in other cases. The Saudi company must provide TRC from ZATCA (Saudi tax authority) and Form 10F.
Does Zakat payment in Saudi Arabia count as tax for DTAA purposes?▾
No. Zakat is a religious obligation under Islamic law and is not recognized as an "income tax" for DTAA purposes. Only corporate income tax (Shariah-based zakat on non-Saudi shareholders is treated differently). Consult a tax advisor for specific structures.
Browse all articles
19 articlesArticle 1 of the India-Saudi Arabia DTAA governs persons covered.…
Article 4 of the India-Saudi Arabia DTAA governs resident.…
Article 5 of the India-Saudi Arabia DTAA governs permanent establishment.…
Article 7 of the India-Saudi Arabia DTAA governs business profits.…
Article 8 of the India-Saudi Arabia DTAA governs shipping, inland waterways, and air transport.…
Article 9 of the India-Saudi Arabia DTAA governs associated enterprises.…
Dividends paid by a company resident in one State to a resident of the other State may be taxed in the recipie…
Interest arising in one State and paid to a resident of the other may be taxed in the recipient's State, with …
Royalties paid to a resident of the other State may be taxed in the recipient's State; the source State retain…
Article 13 allocates taxing rights over capital gains between India and Saudi Arabia.…
Article 14 of the India-Saudi Arabia DTAA governs independent personal services.…
Article 15 sets the taxing rights for salaries earned by an employee of one State who works in the other.…
Article 17 of the India-Saudi Arabia DTAA governs artistes and sportspersons.…
Article 18 of the India-Saudi Arabia DTAA governs pensions.…
Article 19 of the India-Saudi Arabia DTAA governs government service.…
Article 23 sets out the mechanism by which double taxation is eliminated - typically through a foreign tax cre…
MAP allows the competent authorities of India and Saudi Arabia to resolve disputes - particularly transfer pri…
Allows the competent authorities to exchange information necessary to apply the treaty or domestic tax laws.…
Treaty benefits are denied where the principal purpose of the transaction was to obtain them.…
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