The planned expat levy in Saudi Arabia will have an impact on the private sector.
It was announced earlier this year, starting in July, the government of Saudi would start collecting a 100 riyal fee for every expat’s dependent, with plans to increase this fee moderately to 400 riyals until 2020. Although, it has not been determined who will undertake the responsibility of this fee – employer or employee.
The 100 riyal per month fee will be applicable on all dependents (spouse, children, parents and domestic workers) residing in Saudi Arabia on an Iqama permit, usually under their father’s or husband’s sponsorship.
Currently, companies that have more expat employees than Saudi locals are charged 200 riyals every month per expat exceeding the number of locals. There are plans to increase this fee between 2018 and 2020, the tax will increase gradually.
In the near future, the fee will apply to all private sector companies, even if their expats do not exceed the number of local employees.
The fees on expats and dependents are expected to generate 65 billion riyals for the kingdom by 2020.
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