What is the withholding tax?

Non-Saudi residents are subject to a 5% withholding tax on returns received from real estate investments in Saudi Arabia. This tax is deducted at source before the dividends and capital gains are paid out to investors. For example, if a non-Saudi resident receives SAR 1,000 in dividends, SAR 50 will be withheld as tax, and the investor will receive SAR 950. This withholding tax ensures compliance with Saudi tax regulations and affects only the returns distributed to non-residents.