If the international hotel company has an actual presence in Saudi Arabia, like having an office and employees in local hotels to manage and oversee its operations, in this case, its business activity will be governed by the permanent establishment's regulations and related provisions. The management expenses are subject to income tax, and all profits transferred to the head office are subject to a 5% Withholding Tax as stipulated in the provisions of Article (68) of the Tax Law and Article (63) of the Regulations.

If a company does not have an actual presence in Saudi Arabia and all of its management and operations are overseen from abroad, then it will be regarded as a non-resident establishment and all profits received are subject to a 20% Withholding Tax as stipulated in the provisions of Article (68) of the Tax Law and Article (63) of the Regulations.​