Saudi Arabia has no US tax treaty, and no personal income tax on your salary.
No US income tax treaty, no totalization agreement, and no Saudi income tax on employment income. The Foreign Earned Income Exclusion — $130,000 for tax year 2025 — and the foreign housing exclusion do the work, and there is no foreign tax to credit above them.
Tax snapshot — Saudi Arabia
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Sources: IRS Publication 54; IRS Publication 901; Rev. Proc. 2025-32; 31 CFR 1010.350. Checked 28 August 2026.
What that means on your return
Compensation packages here are usually built from a base salary plus housing and transport allowances. All of it is foreign earned income, and the housing element is also a qualified housing expense — so the package structure changes the arithmetic even when the total does not.
The end-of-service benefit is the item most often mishandled. It is compensation for services performed abroad, and which tax year it belongs to depends on when it was earned rather than when it was paid — a distinction worth settling before you resign, not after.
Social insurance contributions are not income taxes. Whatever is withheld under GOSI does not create a foreign tax credit against your US income tax, and it does not relieve US self-employment tax either, because there is no totalization agreement.
If you are in Saudi Arabia as a…
Questions I get about Saudi Arabia
Is my end-of-service benefit taxable in the US?
Yes, as compensation for services performed abroad. The exclusion can cover it, but only for the year it is properly attributed to — which is usually the year it was earned, not the year the money arrived.
I pay GOSI contributions. Are they creditable?
No. Social insurance contributions are not income taxes, so there is nothing to claim on Form 1116, and with no totalization agreement they do not relieve US SECA on self-employment income either.
Do I owe US tax if Saudi Arabia taxes nothing?
You file, and often you owe nothing. The Foreign Earned Income Exclusion covers $130,000 of earned income for tax year 2025, and the foreign housing exclusion can cover more. Above that, US tax applies with no foreign tax credit available.
When is my return due?
15 June, under the automatic extension for filers living abroad. Form 4868 moves it to 15 October, and I file the extension free.
Do I have to file an FBAR for my Saudi bank account?
If your foreign accounts together passed $10,000 at any point in the year, yes. You can file it free through FinCEN's own system. The non-willful penalty for not filing is $16,536.
I have not filed for several years. What now?
The Streamlined Foreign Offshore Procedures: three returns, six FBARs and Form 14653 certifying non-willfulness. Penalties are waived. Note that the IRS terminated the separate Delinquent FBAR Submission Procedures around 1 July 2026.
Filing from Saudi Arabia this year?
Twenty minutes with the Enrolled Agent who will prepare and sign it. Complete return, $599.
An IRS Enrolled Agent working only on US tax for Americans living abroad. I prepare and sign every return myself — 17 years in practice, 12 of them as an Enrolled Agent.