Article 3 of the Saudi Income Tax Law

This article sets the criterion of tax residence. It is an important criterion because Article 2 distinguishes between a resident and a non-resident in subjecting persons to tax, and because the definition of "resident" in Article 1 refers to the conditions of this article.

First: a natural person is considered resident in the tax year if either of two conditions is met:

1. He has a permanent home in the Kingdom and resides in it for a period of not less than 30 days in total in the tax year; the two conditions here are cumulative.
2. He resides in the Kingdom for a period of not less than 183 days in the tax year.

In calculating the period, the person's presence in the Kingdom for part of a day counts as a full day, and his presence is not counted as residence if he is in transit between two points outside the Kingdom.

Second: a company is considered resident during the tax year if either of two conditions is met:

1. It is established under the Companies Law.
2. Its head office is located in the Kingdom.

Whoever does not meet these conditions is a "non-resident" under the definitions, and may be subject to tax if he carries on activity through a permanent establishment (Article 4) or has income from sources in the Kingdom. To assess your tax position precisely, it is advisable to consult a lawyer specialized in tax and commercial matters.