Are capital gains from selling shares on the Saudi stock market taxable for expats?

Good news for investors: Article 10 of the Saudi Income Tax Law explicitly exempts capital gains realized from the disposal of securities traded on the Saudi Stock Exchange (Tadawul) from income tax, subject to certain restrictions specified in the regulations. This means that if you buy and sell shares listed on Tadawul and make a profit, that gain is generally not subject to the standard 20% income tax.

However, this exemption applies specifically to publicly traded securities on the Saudi exchange. Capital gains from the sale of other assets — such as private company shares, real estate, or business assets — are generally treated as taxable income under Article 8, which includes capital gains in the definition of taxable income. The gain or loss on disposal of an asset is calculated as the difference between the compensation received and the asset's cost base, per Article 9.

If you are an expat investor actively trading on Tadawul through a licensed brokerage, your trading profits should be exempt from income tax. However, if you hold shares in a private Saudi company and sell your stake, those gains may be taxable. Always verify the current regulatory restrictions with ZATCA or a qualified tax advisor, as specific conditions apply to the Article 10 exemption.