Shipping costs from Saudi Arabia to collection points abroad-paid to non-resident shipping companies- will be subject to Withholding Tax as stipulated in the provisions of Article 5 (A / 8) of the Income Tax Law.
For shipping costs from assembly points outside the Kingdom to all parts of the world -paid to non-resident companies- if the company is committed to delivering the packages to its final delivery locations abroad, the shipment of packages in this case from the assembly points abroad to the final delivery locations Is an extension of the process of shipping from the Kingdom to the external assembly points, i.e., it represents a single continuous process, therefore, its revenue is subject to Withholding Tax.
If, however, the obligation of the shipper ends only by delivering the shipment to the external port without obligation to deliver it to the final customer's premises, the shipment from the external port to the final customer's premises, in this case, becomes an independent operation and the income earned is not the result of the same activity in the Kingdom; therefore, it will not be subject to Withholding Tax.
