Saudi Arabia’s Tax Treaties: What Does Zakat Have to Do with Them?

Abstract

Three trends can be found in every Saudi tax treaty – the inclusion of zakat in the Saudi tax, the zakat payer exclusion from the methods of eliminating double taxation and the absence of the non-discrimination article. This article investigates the justification for, and consequences of, the inclusion of zakat in Saudi treaties.

Interestingly, the Saudi government has recently introduced a new requirement for most proposed laws and regulations: public consultation (PC). Among the first to address the reform in the Kingdom, this Article offers an overview of the PC concept and its development. This Article compares the U.S. and Saudi PC experiences and further analyzes the Saudi PC adoption to achieve three goals. First, the Saudi reader will gain a better understanding of the PC concept by introducing the U.S. experience (the notice and comment). Second, the U.S. reader, unfamiliar with the Saudi legal system, will gain a better understanding of the Saudi experience, along with a brief but necessary constitutional background. Third, the comparison provides an opportunity to make observations about the two experiences, which paves the road to propose critical recommendations for the Saudi policymaker to realize a meaningful PC implementation. Moreover, this Article documents and analyzes PC practices conducted by Saudi government agencies before and after the adoption of PC in the Kingdom.