Taiwan–Saudi Arabia tax treaty enters into force

The tax treaty signed by the governments of Taiwan and Saudi Arabia in December 2020 entered into force on November 1 following the necessary exchange of diplomatic notes, according to a November 18 announcement from Taiwan’s Ministry of Finance.

The treaty will apply beginning January 1, 2022.

Saudi Arabia is one of Taiwan’s top trading partners, the announcement notes, and the agreement will represent Taiwan’s first comprehensive tax treaty in force with an Islamic country in the Middle East.

For dividends, the treaty sets a maximum 12.5% withholding tax rate.

For interest, the treaty establishes a maximum 10% withholding tax rate, with certain exemptions.

For royalties, the treaty sets a general withholding rate of 10%, with a reduced 4% rate applicable for payments for the right to use industrial, commercial, or scientific equipment.