US-Saudi Arabia Expat Taxes: Your Guide

Saudi Arabia is famous for its vast deserts, rich history, and breathtaking modern skylines—but did you know it’s also one of the few countries with no personal income tax? Even so, if you’re an American citizen living in Saudi Arabia, you may still need to file US expat taxes each year. At least you can take care of it while enjoying world-class dates, qahwa, and the stunning views from the Edge of the World.

As you settle into life in the Kingdom—learning the customs, adapting to the climate, and maybe even picking up some Arabic—you might find yourself wondering: How do I file my US taxes from abroad? This US-Saudi Arabia Expat Tax Guide will help you understand when, how, and where to file your expat taxes from Saudi Arabia, and how to minimize your US tax bill in the process.

Do US Expats in Saudi Arabia Have to File US Taxes?

Key US Tax Deadlines for Expats in Saudi Arabia

What Is the Foreign Bank Account Report (FBAR)?

Do I Need to File FATCA?

What Happens If You Don’t File Your US Expat Taxes?

Moving to Saudi Arabia–What to Expect

Is There a US-Saudi Arabia Tax Treaty?

Saudi Arabia Tax & Immigration

How to Reduce Your US Tax Bill While Living in Saudi Arabia

How Self-Employment and Business Ownership Are Taxed

Property in Saudi Arabia

Retirement in Saudi Arabia for US Expats

Get Help Filing US Expat Taxes from Saudi Arabia

Wealth Management with MyExpatInvest

Do US Expats in Saudi Arabia Have to File US Taxes?

So you’ve moved to Saudi Arabia and might be grateful to not have to deal with US taxes anymore… well, you might not want to hear this. Even though you move to the other side of the world, as a US citizen or Green Card holder, the chances are you’ll still need to file with the IRS. That’s because the US taxes based on citizenship, rather than residency. It’s all based on your filing status and income. Here are the current filing thresholds.

Filing Status	Income Threshold
Single	$14,600
Married Filing Jointly	$29,200
Married Filing Separately	$5
Self-Employed	$400

Key US Tax Deadlines for Expats in Saudi Arabia

Expats automatically get a 2-month extension, and further extensions are available if you need a bit more time.

Standard Filing Deadline	April 15th
Automatic Extension for Expats	June 16th
Deadline for Expats Filing an Extension (file by June 15th)	October 15th
FBAR Deadline for Expats	October 15th
Deadline for Expats if you Filed a Second Extension	December 15th

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What Is the Foreign Bank Account Report (FBAR)?

If you’re a US expat in Saudi Arabia with foreign bank accounts, the FBAR is probably on your to-do list. This is true even if you don’t owe any US tax.

FBAR stands for Foreign Bank Account Report, and it’s filed separately from your tax return. You’ll need to file electronically with FinCEN if your foreign accounts total over $10,000 at any point in the year. That’s the combined balance across all accounts, not just individual ones. Even if no single account hits $10,000, you still have to file if the total does. Think bank accounts, investment accounts, and even some pension funds.

You’ll report them on FinCEN form 114, due on April 15, with an automatic extension to October 15 if you miss the deadline. There’s no tax due with the FBAR—it’s just a reporting requirement. But don’t ignore it. Penalties can be steep, even for honest mistakes.

Do I Need to File FATCA?

FATCA (Foreign Account Tax Compliance Act) requires US citizens and residents to report foreign financial accounts assets to the IRS if they exceed certain thresholds. This is done through Form 8938, which is part of your regular tax return. The threshold for filing is $200,000 for single filers living abroad, but this amount increases for joint filers. Unlike the FBAR, which reports foreign bank accounts, FATCA covers a broader range of foreign financial assets, including stocks, securities, and mutual funds.

Read more: Top 6 Tax Forms For Expats

What Happens If You Don’t File Your US Expat Taxes?

Perhaps you’ve missed a few returns because you didn’t know you had to file while living abroad. Normally, failure to file can result in significant fines, but there is a way to catch up without the penalties. The Streamlined Procedure allows you to become fully compliant by filing 3 years of returns and 6 years of FBARS. To qualify, you need to meet residency criteria, state that your reason for non-filing was not willful (for example, you didn’t know you were required to file), and use the Streamlined Procedure BEFORE the IRS contacts you.

Read more: Get Help with Unfiled Returns

Moving to Saudi Arabia–What to Expect

Living in Saudi Arabia can feel like stepping into a world that balances ancient tradition with cutting-edge development. From bustling souks to futuristic skyscrapers, the country offers a lifestyle unlike anywhere else—especially for those open to change.

While Saudi Arabia doesn’t levy personal income tax, expats should still budget carefully. Private schooling, housing in expat compounds, and healthcare can be costly—so smart financial planning is essential. The healthcare system in major cities is generally high-quality, and many expats choose private insurance to access top-tier facilities. Summers are intensely hot, with temperatures reaching 40°C (104°F), so adjusting to the climate is part of the package.

Culturally, expect a conservative environment rooted in Islamic tradition. Dress codes are modest, public behavior is regulated, and gender roles are more defined than in many Western countries. While women now enjoy more freedoms—such as driving and working across industries—some restrictions and social expectations remain, particularly in rural areas. Many expats choose to live in expat compounds where life is relatively unconstrained. Business culture is formal and relationship-based, with patience and respect for hierarchy highly valued. Daily life takes some getting used to, but expat communities in Riyadh and Jeddah help ease the transition. They offer support, international schools, and a real sense of belonging.

Is There a US-Saudi Arabia Tax Treaty?

There is no US-Saudi Arabia Tax Treaty or Totalization Agreement. As a result, as an American expat in Saudi Arabia, you are generally subject to US taxes on your income. While you can still receive your US Social Security benefits in Saudi Arabia, the absence of a tax treaty means the US will tax your income, including Social Security, without exemptions. Additionally, you may be required to pay US Social Security taxes on your self-employment income.

Saudi Arabia Tax & Immigration

Saudi Arabian Visas for US Expats

Before you can start your tax-free life in Saudi Arabia, you’ll need the right visa. Saudi Arabia has modernized its visa system in recent years, but working and living there still requires some planning.

Here are some of the main visa types for US expats:

• Tourist Visa: This e-Visa is valid for 1 year and allow multiple trips of up to 90 days. While it’s not suitable for long-term expats, it’s useful if you want to explore before making the move.
• Employment Visa: The Employment Visa is the most common route for expats. To get it, you’ll need a confirmed job offer from a Saudi employer who acts as your sponsor. The process includes medical exams, background checks, and official approval from the Ministry of Foreign Affairs. Once approved, you’ll enter Saudi Arabia on a work visa and receive a residency permit (Iqama).
• Premium Residency: Saudi Arabia has a range of Premium Residencies available, including for investors, entrepreneurs, and those with special talents in particular fields.
• Business Visa: For short-term visits related to business or consulting, the Business Visa is available to US employees who are invited by a Saudi company.

You must always maintain valid residency status through your employer sponsor while living in the Kingdom. Overstaying or working without the right permit can lead to fines, deportation, or bans on re-entry.

Tax Residency

You’ll be considered a tax resident of Saudi Arabia if you reside there for not less than 183 days, or if you have a permanent residence and stay for at least 30 days.

Do You Have to Pay Income Tax in Saudi Arabia?

Saudi Arabia does not levy personal income tax on the earned income of residents or non-residents. This means that, unlike in many countries, your salary isn’t subject to local income tax—regardless of your nationality.

Muslim residents may be required to pay zakat, a religious obligation rather than a government tax. Zakat is typically 2.5% of qualifying assets held for one lunar year and is administered through Saudi authorities for eligible individuals and businesses.

Non-residents earning income from Saudi sources may still face withholding tax on certain types of income, such as royalties, rents, technical service fees, and management fees. These taxes are typically withheld at the source before payment is made.

Social Security in Saudi Arabia

In Saudi Arabia, social insurance contributions are paid based on the employee’s monthly basic salary, including any housing provided. For non-Saudi employees, the contribution is 2% of the salary (up to a maximum of SAR 45,000), and it covers occupational hazard insurance—not social security benefits. The employer is responsible for paying this amount.

As an expat working in Saudi Arabia, you’ll pay 9% of your gross income (18% if you are self-employed) in social contributions. Since there is no US-Saudi Arabia Totalization Agreement, American expats may be required to pay into both the US and Saudi Arabian social security systems. You can claim these social security taxes as a foreign income tax credit on your US tax return.

How to Reduce Your US Tax Bill While Living in Saudi Arabia

Foreign Earned Income Exclusion (FEIE)

Want to exclude up to $126,500 of your foreign-earned income from US tax? The Foreign Earned Income Exclusion may be the benefit for you.

Foreign-earned income refers to wages, salaries, professional fees, or any other compensation you receive for personal services you provide while working abroad. Note that money you receive for personal services provided to a corporation may not be considered foreign-earned income if it’s seen as a distribution of earnings or profits, rather than reasonable compensation for your work.

To qualify, you need to live and work outside the US and meet either the Physical Presence Test (330 full days abroad in 12 months) or the Bona Fide Residence Test (a full tax year in another country). You can still qualify for the Bona Fide Residence Test despite the country not levying an income tax, if you are truly a resident in the country. You have to file a US tax return every year using Form 1040, plus Form 2555 to claim the FEIE. It’s important to keep good records of your travel and residency to prove you qualify. This includes flight dates, visa copies, and proof of living arrangements. If you earn more than the FEIE exclusion limit, you might still owe US tax.

Read More: IRS Foreign Earned Income Exclusion.

Foreign Housing Exclusion

As an expat in Saudi Arabia, you can use the Foreign Housing Exclusion to exclude up to $20,240 in certain housing expenses from your taxable income, further reducing your US tax burden.

To qualify, you need to meet the Physical Presence Test or Bona Fide Residence Test. The exclusion can be used for costs such as rent, utilities, and repairs, but not mortgage interest or home improvements.

The exclusion only applies to amounts exceeding a base threshold, which varies by location. To claim the exclusion, you need to file Form 2555 along with your US tax return.

Child Tax Credit

The Child Tax Credit (CTC) is a tax benefit of up to $2,000 per qualifying child under age 17, aimed at reducing your US tax bill. If you earn at least $2,500 and the credit exceeds your tax liability, you may be eligible for a refund under the Additional Child Tax Credit (ACTC) of up to $1,700 per eligible child. You can’t claim the ACTC if you exclude your foreign income using the Foreign Earned Income Exclusion (FEIE).

Foreign Tax Credit (FTC)

If you’ve paid taxes to a foreign government, you can claim a credit to avoid double taxation using the Foreign Tax Credit (Form 1116). You can apply the FTC to all foreign income, not just earned wages; this includes rental income, interest and dividends. The IRS separates earned and passive income categories, so taxes paid on passive foreign income can only be used to offset passive income tax in the US. Similarly, foreign earned self-employment income can only offset US earned income.

Although there’s no personal income tax in Saudi Arabia, some income is subject to taxation. For example, net rental income earned through corporate structures is subject to 20% corporate tax, and for non-residents, a 5% withholding tax is applied to Saudi-sourced dividends, interest, and royalties.

Foreign income that qualifies for the Foreign Tax Credit is still considered taxable income in the US, which means it generally counts toward limits for US-based IRA contributions and eligibility for refundable credits like the Additional Child Tax Credit.

How Self-Employment and Business Ownership Are Taxed

Saudi Arabia offers many professional opportunities and a dynamic business climate—but like any country, it also comes with rules and regulatory obligations. If you’re operating as a freelancer or business owner, you’ll need to comply with local licensing and tax procedures. If you’re self-employed or run a business as an expat, you’ll pay corporate tax of 20% of net profits plus 18% in social security contributions.

How does this affect your US tax situation?

3 Things to Know About US Taxes for the Self-Employed in Saudi Arabia:

1. If you earn $400 or more annually through self-employment, you’ll need to file a US tax return.
2. You’re generally required to pay 15.3% in self-employment tax to the US on net income.
3. There is no totalization agreement between the US and Saudi Arabi. This means you can’t avoid double contributions—US self-employment tax is still due, but it goes toward your future Social Security benefits.

Property in Saudi Arabia

Purchasing property in Saudi Arabia as a US expatriate is an attractive prospect, offering opportunities in a rapidly developing real estate market. To begin, ensure you hold a valid residency permit (Iqama) and obtain approval from the Ministry of Investment (MISA). Residential properties are available for expat investment. Purchase costs include 5% for property registration, and 2-3% in brokerage fees.

While ownership is permitted in designated investment zones, restrictions apply in cities like Makkah and Madinah, where foreign ownership is typically restricted. Engaging with reputable real estate agencies can provide access to verified listings.

When it comes to selling, expect to pay Real Estate Transfer Tax of 5% of the sale value of the property as well as any legal and brokerage costs. As there’s no capital gains tax, you won’t be taxed on profit from the sale in Saudi Arabia.

Purchasing a home or apartment in Saudi Arabia will not trigger a US taxable event by itself. However, if you make a large deposit into your Saudi Arabian bank account for your mortgage or any other purpose, you’ll need to report it on the FBAR (Foreign Bank Account Report) and possibly Form 8938 if the amount exceeds the required thresholds for foreign financial assets.

Similar to US properties, the sale of property you own overseas is liable for US capital gains tax. However, you may qualify to exclude up to $250,000 ($500,000 if filing jointly) of the gain from the sale of your Turkish property, provided it was your main home for at least two out of the last five years.

Read more: 8 Things to Consider When Buying Property Abroad.

Retirement in Saudi Arabia for US Expats

Retirement in Saudi Arabia can be comfortable, especially with its tax-free income and relatively low cost of living compared to the US.

As an expat retiree in Saudi Arabia, you’ll need a valid residency permit to access healthcare. While the National Health Insurance Program covers basic services, many retirees choose private insurance for more comprehensive care. Initial health screenings are mandatory upon entry, and you may need vaccinations before arriving. Be aware that private insurance can become expensive with age, and access to healthcare services may be more limited in rural areas.

Although while working as an expat you’ll pay social security contributions, you won’t qualify for Saudi pension benefits, which are mainly reserved for Saudi citizens and permanent residents who contribute to the General Organization for Social Insurance (GOSI). Since Saudi Arabia has no national pension system for expatriates, saving for retirement is an individual responsibility.

You’ll still be eligible to receive your US Social Security benefits while living in Saudi Arabia, but you must manage them according to US tax rules. The good news is that Saudi Arabia does not tax foreign pensions or personal income, so your US benefits would only be subject to US federal taxes, not local ones.

US-Based Individual Savings Accounts (IRAs)

As a US expat living in Saudi Arabia, you can still contribute a maximum of $7,000 a year ($8,000 for those 50 or over) to Traditional or Roth IRAs. IRAs allow tax-free or tax-deferred contributions that help you save for the future. To be eligible, you need to meet annual income and contribution limits, and your income must be reported on your US tax return. Keep in mind that using the Foreign Earned Income Exclusion (FEIE) to exclude all foreign income makes you ineligible to contribute to an IRA for that tax year.

More details at: IRA Contribution Limits for Expats

Get Help Filing US Expat Taxes from Saudi Arabia

Navigating US-Saudi Arabia expat tax rules takes careful attention, especially since there’s no tax treaty or totalization agreement between the two countries. Local experts can help you stay on track and guide you through the complexities of Saudi Arabian law.

When it comes to your US expat tax filing, MyExpatTaxes are here to help. Join the thousands of satisfied clients who made filing their US taxes around the world hassle free. You can e-file in minutes or get one-to-one support from a tax professional at an affordable price. You can test our software before you commit with no upfront payment required. And if you have any questions about US-Saudi Arabia expat taxes, our friendly customer service team is here to help.

Wealth Management with MyExpatInvest

Many expats move to Saudi Arabia for the financial incentives—zero personal income tax, a high savings potential, and a lower cost of living compared to many Western countries. But to truly make the most of these benefits, you need a strategic plan.

MyExpatInvest is a dedicated wealth management service that matches you to a Financial Consultant who can help you navigate cross-border investing, retirement planning, and tax-efficient savings. With expert guidance, you can secure your financial goals and turn your time in Saudi Arabia into a long-term financial advantage.