Withholding Tax (WHT) Advisory

Withholding tax is the tax deducted at source for certain specific types of payments made by the residents of a country to persons or entities outside that country. In the GCC, Withholding tax (WHT) is not applicable in UAE and Bahrain. WHT is applicable in Kuwait, Oman, Qatar and Saudi Arabia for interest, dividends and royalties paid to non-residents as follows:

• Kuwait: Businesses must retain 5% of all payments made to all beneficiaries which is released upon receiving and producing an NOC from the Kuwait Tax Authority
• Oman: WHT of 10% of gross payments
• Qatar: WHT of 5% on fees, royalties, interest, commissions, and other services.
• Saudi Arabia: WHT of 15% on royalties, 15% on commissions, attendance fees and other services, and 5% on technical fees, interest and dividends.

In the UAE, businesses can seek tax relief within countries which have a Double Tax Treaty with the UAE.

At MBG Corporate Services, our direct tax experts provide a range of WHT services including:

• Implications of country specific WHT on proposed or existing transactions of GCC/ ME entities with foreign and domestic businesses
• Withholding tax health check and diagnostic reviews
• Advice on WHT implications on possible modes of repatriations i.e., interest, fees for technical services and royalty, if any by related parties
• Study on the WHT rates wherever applicable, possible exemptions and exclusions under country CIT and WHT provisions to be read with relevant Double Tax Treaties
• Study and advice on tax retention implications, wherever applicable