US Expat Taxes In Saudia Arabia
Understanding Taxes for Expats in Saudi Arabia
Saudi Arabia does not impose income tax in Saudi Arabia for foreigners, including expats in Saudi Arabia. However, U.S. citizens working in Saudi Arabia as an American must comply with IRS tax obligations, including filing annual tax returns and foreign account reporting.
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Expat Tax Deadline
For U.S. expats, the automatic tax filing extension deadline is June 16th in 2025. If more time is needed, filing Form 4868 before this date extends the deadline to October 15th. The FBAR must also be submitted by October 15th. Certain special cases may qualify for an additional extension until December 15th.
Tax Rules for Expats in Saudi Arabia
While Saudi Arabia does not impose personal income tax, expats earning income must consider U.S. tax obligations. U.S. citizens working in Saudi Arabia as an American must file U.S. tax returns and report foreign financial accounts if they exceed IRS thresholds.
Tax Requirements
U.S. Federal Tax Return (Form 1040)
U.S. citizens and green card holders must report worldwide income, even when residing in Saudi Arabia.
Foreign Bank Account Report (FBAR)
If foreign financial accounts exceed $10,000, U.S. expats must file FinCEN Form 114 to report their holdings.
Foreign Earned Income Exclusion (FEIE)
Qualifying expats can exclude up to $126,500 (2024) in foreign income from U.S. taxation using Form 2555.
Foreign Tax Credit (FTC)
Since there is no income tax in Saudi Arabia for foreigners, the FEIE is a more applicable tax reduction strategy.
Self-Employment Tax
U.S. expats operating as independent contractors in Saudi Arabia must pay U.S. self-employment tax on net earnings.
State Tax Obligations
Depending on your last U.S. residence, you may still have state tax obligations unless you officially sever ties.
Zakat Tax (Saudi Arabia)
Saudi Arabia levies a 2.5% Zakat tax on specific assets, but this applies primarily to Saudi nationals and businesses.
Value-Added Tax (VAT)
The 15% VAT applies to goods and services in Saudi Arabia, but it does not impact income tax.
No U.S.-Saudi Tax Treaty
There is no tax treaty between the U.S. and Saudi Arabia, so U.S. expats must fully comply with IRS tax laws.
Key Facts for Expats in Saudi Arabia
While Saudi Arabia does not impose personal income tax, U.S. expats must still meet their IRS filing obligations. Here are some key considerations:
No Personal Income Tax
Foreigners and residents do not pay income tax in Saudi Arabia.
U.S. Tax Obligations Apply
U.S. citizens must still file IRS tax returns annually.
Zakat & VAT Exist
Zakat tax and 15% VAT apply to businesses and purchases.
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We Have All Your Queries Covered
Have questions about your U.S. expat state taxes? We’re here to help. Below are answers to some common queries we encounter from expats around the world.
Do you pay taxes in Saudi Arabia as an expat?
No, Saudi Arabia does not impose personal income tax on residents or foreigners.
Do U.S. citizens in Saudi Arabia have to pay U.S. taxes?
Yes, U.S. expats must report worldwide income to the IRS annually.
Is there income tax in Saudi Arabia for foreigners?
No, expats in Saudi Arabia are exempt from income tax.
Can Americans work in Saudi Arabia?
Yes, Americans can work in Saudi Arabia if they obtain a valid work visa.
Does Saudi Arabia have tax treaties with the U.S.?
No, the U.S. and Saudi Arabia do not have a tax treaty.
Does Saudi Arabia have VAT?
Yes, a 15% VAT applies to most goods and services in Saudi Arabia.
Still have questions? Contact us today to get expert guidance on all your U.S. expat state taxes.
