Clarification on 15% Saudi Withholding Tax and Refund Eligibility

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This query is : Resolved

Suresh S. Tejwani (Querist)
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24 August 2026 We are an Indian company supplying manpower/services to a customer in Saudi Arabia, from whom 15% tax has been deducted from our payment.
Please clarify what this 15% international/withholding tax represents and under which Saudi tax provision it has been deducted.
Also, please confirm whether this tax is applicable to our manpower supply services under the India–Saudi DTAA.
Finally, please advise whether the 15% tax deducted can be refunded/recovered from Saudi Arabia or claimed as Foreign Tax Credit in India

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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24 August 2026 The 15% deduction represents Saudi Withholding Tax (WHT) under Article 68 on management or technical service fees. Under the India–Saudi DTAA, taxability depends on whether the manpower supply creates a Service PE (>183 days). If tax was validly withheld under the treaty or local laws, it cannot be directly recovered from the buyer, but the Indian company can claim a Foreign Tax Credit (FTC) in India under Section 90 by filing Form 67. If over-deducted under treaty terms, a refund application must be submitted to ZATCA in Saudi Arabia.

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