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This Tax Bulletin clarifies the tax treatment of technical and consulting services provided by non-residents to Kingdom residents under the Income Tax Law and Double Taxation Avoidance Agreements. It defines these services per Article 63 of the Implementing Regulations, distinguishing them from know-how transfers and supply contracts. The guide details the application of the 5 per cent withholding tax mandated by Article 68 of the Law. Furthermore, it examines the interaction with tax treaties, specifically regarding permanent establishments, business profits, and technical service fees, explaining when treaty rates or exemptions supersede domestic statutory provisions for cross-border transactions.

Tax Bulletin: Tax Treatment of Technical or Consulting Services in accordance with the Income Tax Law and Double Taxation Avoidance Agreements

First Edition, 1 December 2025 G

1. Introduction

2. What is meant by Technical and Consulting Services

2.1 Know-how - Transfer of Knowledge - and Technical and Consulting Services
2.2 Supply Contracts Accompanied by Technical and Consulting Service

3. Tax Treatment of Technical and Consulting Services in accordance with the Income Tax Law and its Implementing Regulations

4. Double Taxation Avoidance Agreements

5. Tax Treatment of Technical and Consulting Services in accordance with Double Taxation Avoidance Agreements

5.1 Permanent Establishment and Business Profits
5.2 Fees for Technical Services

Record of Amendments

#	Issue Number	Amendment Date	Section/Clause	Type of Amendment	Description of Amendment
-	-	-	-	-	-

The Zakat, Tax and Customs Authority has issued this tax bulletin for the purpose of clarifying certain treatments related to the application of the statutory provisions in force on the date of its issuance. The content of this bulletin shall not be considered an amendment to any of the provisions of the laws and regulations applicable in the Kingdom.

The Authority confirms its application of the clarifying treatments contained in this bulletin-where applicable-in light of the relevant statutory texts. In the event that any clarification or content in this bulletin is amended-for an unamended statutory text-the updated clarifying treatment shall apply to transactions that take place after the date of publication of the updated version of the bulletin on the Authority's website.

Contents

Record of Amendments

Introduction