Article 11 of the Saudi Income Tax Law
المادة 11 من نظام ضريبة الدخل · الفصل الرابع: الدخل الخاضع للضريبة
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 تلقي التبرعات .
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 11 explained in plain English
This article allows every taxpayer to deduct donations when determining his tax base, so the tax due from him is reduced accordingly. But the deduction is subject to several conditions that the text states:
- The donations must be paid during the same tax year.
- The recipient must be a public body or a charitable association.
- The charitable association must be licensed in the Kingdom, must not aim to make a profit, and must be permitted to receive donations.
A donation to a body that does not have these descriptions does not fall within this deduction under the article's text. The text uses the word "may," so it is a permission for the taxpayer.
This article is among the provisions on taxable income: after taxable income is determined and exempt income is removed (Article 10), and ordinary and necessary expenses are deducted (Article 12), the deduction for donations is added under its conditions. The article states no upper limit on the amount of the donation deducted.
To confirm that a particular body meets the conditions, or for special cases, it is advisable to consult a lawyer specialized in tax and commercial matters.
Practical example
A company in Jeddah, partly owned by a foreign partner, donated SAR 50,000 during its tax year to a charitable association licensed in the Kingdom that does not aim to make a profit and is permitted to receive donations. The company may deduct this amount when determining its tax base.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentCommercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
Ibrahim Al Salem Law Firm
Active contributor
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Frequently asked questions about Article 11 of the Saudi Income Tax Law
Is a donation to a charity deducted from income tax?
It may be deducted from the tax base if it is paid during the tax year to a charitable association licensed in the Kingdom that does not aim to make a profit and is permitted to receive donations.
May a donation to a government body be deducted?
The article allows deducting donations paid to public bodies.
May a donation to an unlicensed association be deducted?
The text requires the association to be licensed in the Kingdom and permitted to receive donations, so a donation to others does not fall within this deduction.
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 10
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.
تعفى الدخول الآتية من ضريبة الدخل : أ - المكاسب الرأسمالية المتحققة من التخلص من الأوراق المالية المتداولة في السوق المالية بالمملكة وفقا للضوابط التي تحددها ال
- 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.