Saudi Arabia Levies Tax on Expat Families

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We’re all aware that most International Schools prefer not to hire ITs with kids and/or a trailing spouse, the obvious reason being the costs associated with relocating a family. Along this vein, Saudi Arabia has made teachers with dependents even less desirable by imposing a hefty “dependent tax” on family members accompanying expats working in the Kingdom. In other words, if you’re an expat working/teaching in Saudi Arabia you’ll pay a hefty, yearly tax to bring your family with you.

Here’s the skinny on the tax: As part of the government’s attempt to balance the budget, an expat working in the Kingdom with dependents will pay 1,200 Saudi riyal ($320 US dollars) per year, per dependent. Additionally, the “dependent tax” is set to increase yearly, reaching the equivalent $1296 US dollars yearly, per dependent. For a teacher with 3 dependents, $3888 is an astronomical yearly tax.

The future of the new “dependent tax” is uncertain, as many foreign workers have decided to send family members home, the consequence being that workers will most likely send money back home and not spend it in Saudi Arabia. It appears the plan may have unintended consequences and, as such, the tax may not be the answer to balancing a budget that’s been in suffering since the decline in oil prices.

ISR ask: What has been your experience with the new “dependent tax” and how are International Schools and teachers coping with this new expense? Are other countries targeting expats in an attempt to raise money?

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