In December 2016 it was first announced by the Saudi government that, to help boost the countries revenues amid weak oil prices, they were to introduce an “expat levy” which would start on 1st July. It is important for us to stress that the Saudi government have yet to release further details of the levy since the budget announcement back in December, and companies are still awaiting the official announcement from the government.
If the proposal does go ahead this would mean that previous SAR 200 fee would be replaced by a SAR 100 levy, which would apply to all foreign employees with no regard to the number of local employees. Under the new plans the levy would then increase on January 1st 2018, which would include the introduction of two further rates; SAR 300 which would affect companies employing more local workers than foreign workers and SAR 400 for companies employing more foreign workers than local workers. There are then plans for future fees of SAR 500/600 in 2019 and SAR 700/800 in 2020 which will use the same two tier structure as previously mentioned.
As well as the above levy introduction, the Saudi government have also imposed a similar levy on dependents of foreign nationals. This means that a SAR 100 fee per dependent will begin on 1st July, which would then increase to SAR 200 in 2018, SAR 300 in 2019, and SAR 400 in 2020. This particular levy on dependents has caused much concern amongst the expats in Saudi. It is worth noting that since the announcement in December the government have yet to confirm this introduction either.
The announcements above have evoked contention from companies in the Kingdom. We will, of course, keep you updated with any further announcements from the Saudi Government in relation to the levy introduction.
In the meantime, if you wish to speak to one of our specialised Saudi advisors please contact a member of our team at firstname.lastname@example.org.