Article 10 of the Saudi Income Tax Law
المادة 10 من نظام ضريبة الدخل · الفصل الرابع: الدخل الخاضع للضريبة
The article exempts from income tax gains on selling securities traded on the Saudi financial market under the Regulations' rules, and gains on disposing of property that is not an activity asset.
Official text (Arabic)
This article has not been amended since the law was issued.
تعفى الدخول الآتية من ضريبة الدخل :
أ - المكاسب الرأسمالية المتحققة من التخلص من الأوراق المالية المتداولة في السوق المالية بالمملكة وفقا للضوابط التي تحددها اللائحة .
ب - الكسب الناتج عن التخلص من الممتلكات من غير أصول النشاط .
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 10 explained in plain English
This article sets out two kinds of income exempt from income tax, which are not included in calculating taxable income:
- Capital gains from disposing of securities traded on the financial market in the Kingdom, in accordance with the rules set by the Regulations. The exemption is not absolute but is subject to the rules of the Implementing Regulations, whose details the Law does not state here.
- Gains from disposing of property that is not an activity asset, that is, property not used in activity intended to make a profit.
The second exemption is consistent with paragraph (c) of Article 9, which prevents a natural person from calculating profit or loss on disposing of an asset not held for activity.
Note that the exemption in paragraph (a) concerns securities traded on the financial market in the Kingdom; under this article's text it does not extend to others. Other profits that are not exempt are included in taxable income and calculated under Article 9.
To know whether the exemption applies to a particular transaction and what its rules are in the Regulations, it is advisable to consult a lawyer specialized in securities and tax.
Practical example
A foreign resident who carries on a commercial activity in Riyadh sold his private car, which he does not use in his activity, at a profit. This gain is exempt under paragraph (b) because the car is not an activity asset.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 10 of the Saudi Income Tax Law
Are profits from selling shares on the Saudi market exempt from income tax?
Yes. Capital gains from disposing of securities traded on the financial market in the Kingdom are exempt, in accordance with the rules set by the Regulations.
Is selling personal property unrelated to the activity subject to income tax?
No. Gains from disposing of property that is not an activity asset are exempt under paragraph (b).
Is the exemption on shares absolute?
No. The text ties it to the rules set by the Implementing Regulations.
More articles on Taxable Income and Exemptions
- Article 5
The article lists the cases in which income is treated as arising from a source in the Kingdom, and provides that the place of payment does not determine the source of income.
أ - يعد الدخل متحققا من مصدر في المملكة في أي من الحالات الآتية : 1 - إذا نشأ عن نشاط تم في المملكة. 2 - إذا نشأ عن ممتلكات غير منقولة موجودة في المملكة ، بما ف
- Article 9
The article sets how to calculate profit or loss on disposing of assets, the basis of their cost, and the cases of gifting, inheritance, compulsory disposal and transfer to personal use.
أ - الربح أو الخسارة المتحققة من التخلص من الأصل هو الفرق بين التعويض المستلم عن الأصل وأساس التكلفة له. ب - لا يحتسب ربح أو خسارة عند التخلص من أصل قابل للاسته
- Article 11
The article allows donations paid during the tax year to public bodies or licensed non-profit charities permitted to receive donations to be deducted when determining the tax base.
يجوز لتحديد الوعاء الضريبي لكل مكلف حسم التبرعات المدفوعة خلال السنة الضريبية إلى هيئات عامة ، أو جمعيات خيرية مرخص لها بالمملكة لا تهدف إلى الربح، ويجوز لها تل
- Article 31
The article requires including in the taxpayer's total income any payment from which he benefits directly or indirectly, and any payment disposed of on his instructions, if it would be income had it been paid to him directly.
يجب أن يشتمل إجمالي دخل المكلف على أي دفعة يستفيد منها المكلف مباشرة أو غير مباشرة ، وكذلك أي دفعة يتم التصرف بها وفقا لتعليماته إذا كانت تلك الدفعة تعد دخلا لل
- Article 32
The article provides that compensation amounts received by the taxpayer take the character of what they compensate for in the tax treatment.
تأخذ مبالغ التعويض المستلمة صفة المعوض عنه.
- Article 39
The article sets the cost basis of property contributed to a partnership, and adjusts the cost basis of its assets up or down when a partner leaves with a gain or loss on disposing of his share.
أ - أساس التكلفة الأولية للممتلكات المقدمة لشركة الأشخاص تساوي أساس التكلفة للشريك الذي قدمها . ب - إذا خرج شريك من شركة أشخاص واستلم توزيعا يجعله يحقق ربحا من
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.