Tax Comparison
Turkey vs Saudi Arabia
Saudi Arabia has no personal income tax for individuals, though a 15 % VAT (increased from 5 % in 2020) and social security contributions for Saudi nationals apply. Turkey's zero-foreign-income exemption proposal partially bridges the gap for new residents with foreign income.
Overview
Saudi Arabia does not levy personal income tax on individuals' employment or investment income. The country instead relies on Zakat (a religious wealth levy of 2.5 % on qualifying Muslim-owned business assets) and — from 2018 — a Value Added Tax (VAT) at 15 %. Saudi Aramco and other state-connected entities pay corporate income tax, but private individuals working in Saudi Arabia pay no personal income tax.
Turkey's progressive income tax reaches 40 % at its top band. For expats comparing the two countries purely on personal income taxation, Saudi Arabia wins on the zero personal tax rate. However, Turkey's proposed Art. 23/14 foreign income exemption — if enacted — would allow qualifying new Turkish residents to exempt foreign-source income from Turkish tax for up to 20 years, partially replicating the zero-tax position for expats earning from abroad.
Turkey and Saudi Arabia have a double-tax treaty in force. The treaty addresses corporate income and prevents double taxation on cross-border business income, dividends, and royalties. The personal income tax comparison is somewhat theoretical since Saudi Arabia doesn't tax personal income — but corporate structures and investment income are where the treaty becomes relevant.
Tax highlights at a glance
Turkey
- Income tax bands
- 15 % → 20 % → 27 % → 35 % → 40 % (progressive, 2025 TRY brackets)
- Standard VAT
- 20 %
- Social security (employee)
- ~14 % of gross salary
- Corporate tax
- 25 % (verify at gib.gov.tr)
- Foreign income exemption (proposed)
- Art. 23/14 — verify at gib.gov.tr
- Inheritance / gift tax
- 1 %–30 %
Saudi Arabia
- Personal income tax
- 0 % for individuals (no personal income tax)
- VAT
- 15 % (increased from 5 % in 2020)
- Zakat
- 2.5 % on qualifying business assets for Saudi national-owned entities
- Corporate income tax
- 20 % on non-Saudi/GCC foreign shareholder share of profits (verify at zatca.gov.sa)
- Social insurance (GOSI)
- Applicable to Saudi nationals and some expatriate categories — verify current rules
Key differences
| Topic | Turkey | Saudi Arabia |
|---|---|---|
| Personal income tax | 15 %–40 % progressive (or 0 % on foreign income if Art. 23/14 enacted) | 0 % — no personal income tax |
| VAT rate | 20 % | 15 % |
| Corporate income tax | 25 % | 20 % on foreign shareholder share of profits (verify at zatca.gov.sa) |
| Inheritance / estate tax | 1 %–30 % depending on relationship | Generally none for individuals (Zakat on business assets for qualifying entities) |
| Double-tax treaty | Yes — Turkey-Saudi Arabia DTT in force | Yes — Saudi Arabia-Turkey DTT in force |
Double-tax treaty
Turkey and Saudi Arabia have a double-tax treaty in force.
Turkey and Saudi Arabia have a double-tax treaty in force. The treaty primarily addresses corporate income, dividends, interest, and royalties. Given Saudi Arabia's zero personal income tax, the treaty's personal income provisions are of limited practical relevance for individual expats — but the treaty is important for businesses, investors, and entities with cross-border income flows. Verify treaty details at gib.gov.tr.
Source: https://www.gib.gov.tr
Who should consider this comparison?
- Saudi Arabia-based professionals who are considering Turkey as an alternative base and want to understand the comparative personal tax position.
- Saudi and GCC nationals who own Turkish real estate or investments and need to understand Turkish tax obligations.
- Business owners with entities in both Turkey and Saudi Arabia who want to understand the DTT's corporate tax provisions.
- Expats in Saudi Arabia who earn income from multiple sources and want to compare Turkey's tax framework against their Saudi tax-free status.
- Saudi residents exploring Turkish citizenship-by-investment who want to understand the tax implications of establishing formal Turkish residency.
FAQ
Frequently asked questions
- Is Saudi Arabia completely tax-free for individuals?
- Saudi Arabia does not levy personal income tax on employment or investment income for individuals. However, since 2020, a 15 % VAT applies to most goods and services — making Saudi Arabia no longer a zero-tax environment for consumers, even if personal income tax is absent. Saudi nationals (and in some cases GCC nationals) may also be subject to Zakat on qualifying business assets. Expatriates working in Saudi Arabia do not typically pay personal income tax or Zakat.
- Does the Turkey-Saudi Arabia DTT protect my income from being taxed in both countries?
- The Turkey-Saudi Arabia DTT provides mechanisms to allocate taxing rights and prevent double taxation on cross-border income. For individuals, the most relevant provisions typically cover business income and investment returns. Since Saudi Arabia does not impose personal income tax, the DTT's personal income articles have limited practical effect from the Saudi side. For businesses and investors with income in both countries, the corporate and passive-income articles of the treaty are more relevant — verify specific provisions at gib.gov.tr.
- If I move to Turkey from Saudi Arabia, will I start paying Turkish income tax?
- If you establish Turkish tax residency (by spending 183+ days in Turkey in a calendar year or maintaining a domicile in Turkey), you will be subject to Turkish progressive income tax on worldwide income — including any Saudi-source income. Turkey's proposed Art. 23/14 foreign income exemption could exempt foreign-source income for qualifying new residents, but you should verify the current legislative status. In contrast to Saudi Arabia's zero personal tax, Turkey does impose income tax — the comparison depends on your income level and source.
- How does Turkey's VAT compare to Saudi Arabia's VAT?
- Turkey's standard VAT (KDV) is 20 %, compared to Saudi Arabia's VAT at 15 %. Saudi Arabia's VAT was only introduced in 2018 and increased to 15 % in 2020. For businesses operating across both jurisdictions, the different VAT systems require separate compliance. As a consumer, you would pay higher VAT on purchases in Turkey than in Saudi Arabia for the same goods.
- Does Saudi Arabia have an inheritance tax?
- Saudi Arabia generally does not levy an inheritance tax on individuals' personal assets. Succession in Saudi Arabia follows Islamic inheritance law (Sharia), which prescribes specific distributions — but does not impose a government inheritance tax on the transfer itself. Turkey, by contrast, has an Inheritance and Gift Tax Law with rates from 1 % to 30 % depending on the relationship between deceased and beneficiary. Saudi nationals with Turkish property are subject to Turkish inheritance tax on those Turkish-sited assets.