The cabinet of Saudi Arabia officially approved the Intergovernmental Agreement (IGA) between Saudi Arabia (KSA) and the United States (US) on 6 February 2017. The agreement would improve international tax compliance and implement the Foreign Account Tax Compliance Act (FATCA).
According to the agreement, KSA based financial institutions will be considered as compliant with FATCA and therefore will not be subject to the 30% withholding tax on US source income and gross proceeds.
If the financial institution fails to comply with the IGA requirements, the General Authority for Zakat and Tax may subject the relevant financial institutions to penalties.
