Do I have to file at home while living in Saudi Arabia?
For most people the answer turns on whether the ties that made them resident have actually ended. For a US citizen or green-card holder it does not: the return is due in Saudi Arabia exactly as it would be at home. Everything else on the file follows from which of those you are.
Is there a treaty between my country and Saudi Arabia?
That is verified rather than assumed: we confirm which treaty text governs Saudi Arabia and your home country for the year in question, because a protocol can move a rate or an article between years. If there is no treaty, unilateral credit rules are what prevent double taxation.
I own property in Saudi Arabia. Where is the rent taxed?
Rent from immovable property is almost always taxable where the property is situated, frequently by withholding on the gross amount, with your home country taxing the same income and giving credit. A net-basis election, where one exists, is usually the difference between tax on profit and tax on turnover.
I live in Riyadh but work for a Canadian company — where am I taxed?
Two questions decide it and they are often confused. The first is where you are resident, which governs how much of your worldwide income your home country can tax. The second is where the work is physically performed, which governs which country has the first claim on the employment income itself. Living in the Kingdom and performing your duties there points the sourcing away from Canada; your employer being Canadian does not, by itself, bring the income back. But if your residence never ended, the income is taxable at home whatever the address on the payslip, and with no local income tax there is nothing to credit against it.
My employer still deducts home payroll tax although I have left — why?
Because the employer is obliged to withhold unless it has been told, on a proper basis, that it need not. Payroll systems run on the address and status recorded for you, not on the facts of your life, and a payroll department will not change that on a phone call. The route is to establish your residence position, notify the employer formally with the date it changed, and where the home country offers a mechanism for reducing or waiving withholding for an employee working abroad, apply for it. Until that is done the deductions continue, and the only recovery route is a return filed after the year ends.
Does my employer have to register in Saudi Arabia because I work here?
It might, and this is the risk most often overlooked in these arrangements. A foreign company can acquire a taxable presence in a country through what its people do there, particularly where an employee habitually plays the principal role in concluding contracts that the company then signs without material change. A developer working quietly on a product is a different fact pattern from a salesperson closing deals. The exposure belongs to the employer rather than to you, but it is usually you who has to answer the questions, and employers who find out late tend to end the arrangement rather than fix it.
Should I be an employee or a contractor while based in Saudi Arabia?
That is not usually a free choice, and treating it as one is where the trouble starts. The characterisation follows the substance of the relationship: who controls the work, who carries the risk, who provides the tools, whether you can send someone else in your place. If the substance is employment, a contract saying otherwise does not change the obligations, it only means they were not met. The payer at home carries real exposure if it treats a person as a contractor and is later found to have engaged an employee. Decide it on the facts, write the arrangement to match, and keep the invoices and records consistent with what was decided.
I am a US citizen freelancing from Saudi Arabia — what must I file?
The income tax return continues, because citizens file on worldwide income wherever they live, and self-employment brings its own layer of reporting on top of the income tax. Separately, the bank account you use to collect fees is reportable in its own right through the foreign account regime that FBAR serves, and that obligation depends on the account existing rather than on how much you earned through it. If you have set up any entity locally to hold the work, say so early: foreign entity reporting is a third set of obligations again, and it carries the harshest consequences for being missed.
Can I keep my home bank account and still be non-resident?
Usually yes. A bank account is a secondary tie and rarely decides residence on its own; keeping one open is normal and often necessary for pensions, loans and old direct debits. What carries weight is where your home is, where your spouse and children live, and where your settled routine sits. The mistake runs in the other direction: people close accounts and cancel cards, believing that makes them non-resident, while keeping a house available and the family living in it. Those are the facts that count, and no amount of tidying up the minor ties will outweigh them.
What is the difference between FBAR and Form 8938?
They overlap but are not the same report. The FBAR goes to FinCEN and covers foreign financial *accounts*; Form 8938 goes to the IRS with the return and covers a wider class of specified foreign financial *assets*, with thresholds that vary by filing status and whether you live abroad. Many people must file both for the same accounts, and satisfying one does nothing for the other. See filing both.
Is there a limit on the foreign tax credit?
Yes, and it is the whole design. To calculate the limit you compute the US tax on your foreign-source income in that category; the credit cannot exceed it, because its purpose is to stop double taxation, not to refund another country's tax. Pay a higher rate abroad than the United States charges and the excess is not lost but deferred, becoming a carryover for a year with room. Pay a lower rate and the credit simply covers the foreign tax. See Form 1116.
