Saudi Arabia Fiscal & Treaty Framework
1. Bilateral Tax Accord & Jurisdictional Allocation (Saudi Arabia)
Relocating from Saudi Arabia to Spain activates the provisions of the Convention between the Kingdom of Saudi Arabia and the Kingdom of Spain for the Avoidance of Double Taxation (2007). Under Article 15 of this bilateral accord, employment income is strictly allocated based on physical presence. If you move your tax residency from Saudi Arabia without electing the 24% Beckham Law regime via Form 149, the Spanish Tax Authority (AEAT) will subject your worldwide earnings to progressive Spanish income tax (IRPF) reaching up to 47% (and up to 54% in autonomous regions like Valencia).
By contrast, electing the Special Regime for Inbound Workers (Article 93 LIRPF) caps your Spanish employment tax at a flat 24% for active labor income up to €600,000 per year. Furthermore, foreign-sourced passive income (such as dividends, interest, or rental yield originating in Saudi Arabia) remains 100% EXEMPT from Spanish income tax.
2. Taxation of Saudi End of Service Award (Labour Law Art. 84), Aramco / PIF Stock Plans, and Executive Carried Interest.
A critical area of divergence for executives from Saudi Arabia involves Saudi End of Service Award (Labour Law Art. 84), Aramco / PIF Stock Plans, and Executive Carried Interest.. Under DGT Binding Ruling V0813-23, unvested equity grants are time-sliced across the vesting grant period: only the fraction of workdays physically performed on Spanish soil is added to your Spanish 24% taxable base.
Regarding corporate distributions, 0-5% Zakat / WHT rate under Treaty Article 10 for Spanish tax residents. This provides significant cash flow protection compared to standard non-resident rates.
3. Statutory Departure & Compliance Requirements
Prior to relocating from Saudi Arabia, you must address local departure formalities: Final Exit Visa (Khuruj Nihai) & ZATCA Tax Clearance Certificate prior to departure. Zero-tax origin status requires proving genuine physical move to Spain to avoid AEAT residence challenge. Article 84 Labour Law End of Service Award evaluated under Spanish DGT Ruling V0813-23.