Saudi-source income
In one sentenceIncome considered to arise inside the Kingdom under the law's rules, such as a fee for a service performed here or rent for property here, so it is subject to tax even if the beneficiary is a non-resident.
Simply put
The question that decides the tax on a non-resident: is the source of the income in the Kingdom? If so, it is subject to tax, usually through withholding.
Examples: services paid for by a resident party, royalties for using a right in the Kingdom, and dividends from a resident company.
Worked example
A resident company paid a foreign company a software royalty of 100,000 SAR.
Payment100,000 SAR
Withholding rate on royalties15%
Calculation100,000 × 15%
Withholding tax on Saudi-source income15,000 SAR
Don't confuse it with
Place of supplyThe place of supply is a VAT rule, while the source of income is a rule for income tax and withholding.