Withholding Tax (WHT) Advisory
Withholding Tax (WHT) Advisory
Withholding tax (WHT) is a tax deducted at the source for specific types of payments made by residents of a country to non-resident individuals or entities. In the GCC, the WHT regime varies across countries. Notably, the UAE and Bahrain do not impose WHT, while Kuwait, Oman, Qatar, and Saudi Arabia apply WHT on certain payments to non-residents, as follows:
- Kuwait: A 5% withholding tax is applied to all payments made to beneficiaries. This amount is released upon obtaining a No Objection Certificate (NOC) from the Kuwait Tax Authority.
- Oman: A WHT of 10% is levied on gross payments.
- Qatar: A WHT of 5% applies on fees, royalties, interest, commissions, and other services.
- Saudi Arabia: A 15% WHT applies on royalties, commissions, attendance fees, and other services. A 5% rate applies on technical fees, interest, and dividends.
In the UAE, businesses can seek tax relief under Double Tax Treaties (DTT) with countries having an agreement with the UAE.
At PTG Consultant Corporate Services, our team of direct tax experts offers comprehensive WHT advisory services, including:
- Assessing the implications of country-specific WHT on proposed or existing transactions between GCC/ME entities and foreign or domestic businesses.
- Conducting WHT health checks and diagnostic reviews.
- Providing advice on the WHT impact of potential repatriation methods (e.g., interest, technical service fees, royalties) between related parties.
- Analyzing applicable WHT rates, potential exemptions, and exclusions under country-specific Corporate Income Tax (CIT) and WHT provisions, in conjunction with relevant Double Tax Treaties.
- Offering guidance on tax retention implications where applicable.
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Withholding Tax and UAE Businesses
The UAE Corporate Tax Law includes a withholding tax regime, but the rate on UAE-source income paid to non-residents is currently set at 0%. In practice, the more important question for UAE businesses is the withholding tax deducted abroad when foreign customers or group companies pay UAE entities for services, interest, royalties or dividends.
- Foreign withholding tax can take a significant share of the invoice value, depending on the country and type of payment
- UAE tax treaties often reduce or eliminate these rates, but only if the correct forms and a UAE Tax Residency Certificate are provided in time
- Tax withheld abroad may be claimed as a Foreign Tax Credit in your UAE Corporate Tax return, within the limits of the law
Our WHT Advisory Services
- Review of cross-border contracts and payment flows
- Treaty-rate analysis and preparation of beneficial-ownership and residency documentation
- Refund claims for excess withholding in the source country
- Contract clauses (gross-up and tax provisions) to protect your margins
- Alignment with UAE Corporate Tax, transfer pricing and FTC calculations
Frequently Asked Questions
Does the UAE deduct withholding tax on payments to foreign suppliers?
At present the UAE withholding tax rate is 0%, so UAE payers generally do not withhold Corporate Tax on payments to non-residents.
How can I reduce foreign withholding tax on my invoices?
By applying the relevant tax treaty with a valid UAE Tax Residency Certificate and the paying country’s forms before payment is made.
Losing margin to foreign withholding tax?
Speak to an FTA-registered tax agent. Free 15-minute initial consultation.
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