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| Saudi Arabia Zakat and Tax SystemThe Kingdom of Saudi Arabia has a very liberal tax system; there are few taxes payable by an individual or a company and they are also at very low rates.
All legitimate business expenses and costs, including business losses and depreciation, are deductible in computing net profits. Any reasonable method of depreciation may be adopted by the company but the same must be adhered to from year to year. Capital gains are included in the profits of the company. The following tax rates, on a slab basis, are now in force:
Income tax is charged at different rates for companies engaged in the production of petroleum and hydrocarbons in the Kingdom. Every company is required to submit a financial statement on an official form and to pay the tax not later than the 15th day of the third month of the year following the Saudi Arabian fiscal year, which commences on the 10th of Capricorn (December 31). Companies formed under the provisions of the Foreign Capital Investments Regulations with participation of Saudi capital of not less than 25 percent are exempt for up to ten years from payment of income tax. For further details, please contact the Ministry of Finance and National Economy, Directorate of Zakat and Income, Companies Department, (see appendix I for address).
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