Withholding Tax (WHT) refers to the tax deducted at source on certain payments made by residents of one country to non-residents. While the UAE and Bahrain currently do not levy WHT, other GCC countries like Kuwait, Oman, Qatar, and Saudi Arabia impose varying WHT rates on outbound payments such as interest, dividends, royalties, and technical fees.

Here’s a snapshot of WHT rates across the region:

• Kuwait: 5% withholding on all payments, released upon submission of a No Objection Certificate (NOC) from the Kuwait Tax Authority

• Oman: 10% WHT on gross payments to non-residents

• Qatar: 5% WHT on royalties, interest, commissions, technical fees, and services

• Saudi Arabia: 15% WHT on royalties and commissions, and 5% on dividends, interest, and technical service fees

In the UAE, although there is no local WHT, businesses engaged in cross-border transactions may still be impacted when dealing with countries that do apply WHT. Fortunately, the UAE’s extensive Double Taxation Avoidance Agreements (DTAAs) can provide relief from or reduction in withholding obligations in many cases.

How Goldstone Can Help You Navigate Withholding Tax

At Goldstone, our direct tax specialists offer comprehensive advisory and compliance support related to WHT across the GCC and MENA regions. We provide practical, jurisdiction-specific guidance to help your business remain compliant and tax-efficient in all outbound payment structures.

Our WHT Services Include:

• Evaluation of country-specific WHT implications on existing or proposed transactions

• Withholding Tax health checks and diagnostic reviews of contractual structures

• Advisory on WHT impacts on cross-border repatriation strategies, such as royalties, technical service fees, and intercompany interest

• Analysis of applicable WHT rates, exemptions, and treaty benefits under relevant Double Tax Treaties

• Advice on tax retention requirements, local tax authority expectations, and documentation needs for compliance