Ministerial Resolution number 1/98
The Minister of Finance and National Economy, based on powers entrusted to him,
and pursuant to Article (19) of Income Tax Law issued by Royal Decree no. 3321
dated 21/01/1370H. And relevant amendments based on Cabinet Resolution no. (3)
dated 5/1/1421 H approving the state of bearing 15% of taxes imposed on
corporate annual profits in excess of One hundred thousand Saudi Riyals (SR.
100.000) and of indefinite loss carry forward; and having reviewed the
submittal by the Acting Director General of Department of Zakat and Income Tax
(DZIT) in his memorandum dated 14/01/1421 H, presenting conclusions of the
committee commissioned to set-up controls for the implementation of the said
resolution, hereby resolves:
1. For the purpose of the state bearing 15% of taxes imposed on corporate
profits in excess of SR.100.000, the percentage will be applied against tax
bracket rates stipulated in Article (11) of Tax law issued by Royal Decree no
3321 dated 21/01/1370H. This provision will apply to all capital companies
subject to tax with exception to companies operating in production of oil, gas
and hydrocarbons.
2. Bearing by the state of the set percentage is limited to annual profits in
excess of SR. 100.000 and it applies to capital companies as per the following
stratification:
|
Bracket (SR)
|
Previous
|
New
|
|
First Bracket: From 1 to 100,000
|
25%
|
25%
|
|
Second Bracket: From 100,001 to 500,000
|
35%
|
20%
|
|
Third Bracket: From 500,001 to one million
|
40%
|
25%
|
|
Fourth Bracket: Over one million
|
45%
|
30%
|
3. Net losses that may be carried forward are operational losses as legally
adjusted regardless of book losses. Operational losses mean deductions allowed
under Article (14) of Tax Law that are in excess of income subject to tax
during the year.
4. The provision of loss carry-forward is granted to all taxpayers that keep
legal accounts and are subject to tax under the said Royal Decree.
5. Tax payers exempted from tax will not enjoy the provision of loss
carry-forward with exception to losses incurred after the expiry of their tax
holidays.
6. This Resolution applies to financial years ending after the issuance date of
this Resolution and will not apply to accounts of preceding years regardless of
status, filled with DZIT or not, assessed or not being seen by the committee /
Higher Appeal Committee or not.
7. The Director General of DZIT shall approve the implementation of this
Resolution and will inform whoever is concerned to enforce it.
Ministerial Resolution number 1/98
The Minister of Finance and National Economy, based on powers entrusted to him,
and pursuant to Article (19) of Income Tax Law issued by Royal Decree no. 3321
dated 21/01/1370H. And relevant amendments based on Cabinet Resolution no. (3)
dated 5/1/1421 H approving the state of bearing 15% of taxes imposed on
corporate annual profits in excess of One hundred thousand Saudi Riyals (SR.
100.000) and of indefinite loss carry forward; and having reviewed the
submittal by the Acting Director General of Department of Zakat and Income Tax
(DZIT) in his memorandum dated 14/01/1421 H, presenting conclusions of the
committee commissioned to set-up controls for the implementation of the said
resolution, hereby resolves:
1. For the purpose of the state bearing 15% of taxes imposed on corporate
profits in excess of SR.100.000, the percentage will be applied against tax
bracket rates stipulated in Article (11) of Tax law issued by Royal Decree no
3321 dated 21/01/1370H. This provision will apply to all capital companies
subject to tax with exception to companies operating in production of oil, gas
and hydrocarbons.
2. Bearing by the state of the set percentage is limited to annual profits in
excess of SR. 100.000 and it applies to capital companies as per the following
stratification:
|
Bracket (SR)
|
Previous
|
New
|
|
First Bracket: From 1 to 100,000
|
25%
|
25%
|
|
Second Bracket: From 100,001 to 500,000
|
35%
|
20%
|
|
Third Bracket: From 500,001 to one million
|
40%
|
25%
|
|
Fourth Bracket: Over one million
|
45%
|
30%
|
3. Net losses that may be carried forward are operational losses as legally
adjusted regardless of book losses. Operational losses mean deductions allowed
under Article (14) of Tax Law that are in excess of income subject to tax
during the year.
4. The provision of loss carry-forward is granted to all taxpayers that keep
legal accounts and are subject to tax under the said Royal Decree.
5. Tax payers exempted from tax will not enjoy the provision of loss
carry-forward with exception to losses incurred after the expiry of their tax
holidays.
6. This Resolution applies to financial years ending after the issuance date of
this Resolution and will not apply to accounts of preceding years regardless of
status, filled with DZIT or not, assessed or not being seen by the committee /
Higher Appeal Committee or not.
7. The Director General of DZIT shall approve the implementation of this
Resolution and will inform whoever is concerned to enforce it.