Tax Base of Residents and Non-residents in Saudi Arabia

Tax Base of Residents and Non-residents in Saudi Arabia for resident company and non residents on their its taxable income from any activity from sources within the Kingdom of Saudi Arabia minus expenses permitted under this Law.

The tax base of a resident non-Saudi natural person is his taxable income from any activity from sources within the Kingdom of Saudi Arabia minus expenses permitted under this Law.

The tax base of a non-resident who performs an activity within the Kingdom of Saudi Arabia through a permanent establishment is his taxable income arising from or related to the activity of such establishment minus expenses permitted under this Law.

The tax base of each natural person is determined separately.

The tax base of a capital company is determined separately of its shareholders or partners.

Joint Property: Income or expenses relating to jointly-owned property are apportioned among partners in proportion to their respective shares in the property.

A. Joint Property: Income or expenses relating to jointly-owned property are apportioned among partners in proportion to their respective shares in the property.

a)If calculation of the tax base or gross income involves non-cash properties, services, or other benefits, their fair market value is calculated as of the date it was recorded in the books for taxation purposes.

b)The market value of non-cash property transferred to an employee or any other service provider is determined without regard to any restriction on transfer of ownership.

B. The gross income of a taxpayer shall include any payment from which the taxpayer benefits directly or indirectly, as well as any payment dealt with according to its instructions, if such payment is considered income of the taxpayer if paid to the taxpayer directly.

C. Compensation amounts received shall take the character of what is compensated for i.e. compensation receipts for damage in goods (trading stock) are deemed to be income subject to tax, but compensation receipts for assets are dealt with in accordance with disposal of asset.

Gross income and tax base are calculated in Saudi riyal.

If calculation of income involves an amount in a currency other than the Saudi riyal, the amount shall be calculated for taxation purposes in Saudi riyal at the exchange rate declared by the Saudi Arabian Monetary Agency on the date of the transaction.

NOTE: Currency conversion profits or losses resulted from reevaluation for tax purposes are not taken into account.

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