TABLE OF CONTENTS
Remote People employees in Saudi Arabia may incur work-related expenses in the course of business. This guide outlines how expenses are handled, what documentation is required, and the applicable tax rules in Saudi Arabia.
Invoicing & Documentation
Documentation required:
All business expenses must be supported by invoices or receipts. Proof of payment is mandatory.
E-invoices must comply with ZATCA requirements:
ZATCA – E-Invoicing
Invoice threshold:
There is no threshold. All services and expenses must be invoiced under ZATCA rules:
ZATCA Rules & Regulations
Travel & Mileage
Mileage reimbursement:
Saudi Arabia does not mandate a statutory mileage rate. Companies may:Adopt a fixed rate per kilometre, or
Reimburse actual fuel and maintenance expenses with receipts.
Rates must align with the company's internal policy.
Parking tickets & tolls:
Treated as separate expenses, supported by receipts. Not combined with mileage logs unless otherwise specified in company policy.More details about parking: Mawgif
Business travel restrictions (Article 58 of the Saudi Labor Law):
Employers may assign employees to a different location for up to 30 days per year without employee consent.
Employers are responsible for transportation and accommodation costs.
The law does not set fixed reimbursement amounts; costs must be reasonable based on market rates.
Modes of travel:
No legally mandated rules. Clients set their internal policies to define acceptable modes of transport, travel classes (e.g., economy vs. business), and limits.
Reimbursement & Taxability
Business expenses:
In Saudi Arabia, all business expenses are considered taxable for VAT purposes. Examples:Airline tickets
Parking fees
Gasoline
Accommodation
Meals
Per diems:
There are no statutory per diem rates in Saudi Arabia.
Companies may set their own policies for national or international travel.
Per diems paid directly to employees are subject to VAT, as they are treated as income.
Client entertainment & gifts:
Entertainment and gifts provided through vendors are subject to tax.
Companies should ensure such expenses remain reasonable and business-related.
Health & wellness expenses:
Employers are required by law to provide a medical insurance policy for employees.
Employees must submit medical claims directly to their insurance provider.
Other wellness-related expenses (e.g., gym memberships, yoga, therapy) are not typically reimbursable, unless specifically allowed by company policy.
VAT Considerations
VAT applies to all reimbursable expenses in Saudi Arabia.
If the client is VAT-registered in KSA, VAT may be reclaimed provided the invoice complies with ZATCA rules and clearly states the nature of the expense.