Article 30 of the Saudi Income Tax Law
المادة 30 من نظام ضريبة الدخل · الفصل السابع: قواعد إضافية لتحديد الوعاء الضريبي
The article provides that total income and the tax base are calculated in Saudi riyals, and that foreign amounts are converted at the exchange rate announced by the Saudi Arabian Monetary Authority on the date of the transaction.
Official text (Arabic)
This article has not been amended since the law was issued.
أ - يحتسب إجمالي الدخل والوعاء الضريبي بالريال السعودي.
ب - إذا تضمن احتساب الدخل مبلغا بعملة غير الريال السعودي ، يحسب المبلغ للأغراض الضريبية بالريال السعودي وبسعر الصرف المعلن عن مؤسسة النقد العربي السعودي في تاريخ العملية .
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 30 explained in plain English
This article sets the currency in which income and tax are calculated, and how to deal with transactions in foreign currencies:
- The currency of calculation (paragraph a): total income and the tax base are calculated in Saudi riyals, even if the establishment mainly deals in another currency.
- Conversion (paragraph b): if the calculation of income includes an amount in a currency other than the riyal, it is calculated in Saudi riyals at the exchange rate announced by the Saudi Arabian Monetary Authority.
- Timing of the rate: the announced rate on the date of the transaction itself applies, not on the date the return is prepared or at year end.
This means each transaction in a foreign currency has its own conversion rate according to its date, and that the official reference for the rate is what the Saudi Arabian Monetary Authority announces, not the rate applied by the bank the taxpayer deals with.
This article is among the additional rules for determining the tax base, like Article 29, which provides for calculating non-cash benefits and property at market value on the date they are recorded in the books, and Article 31, which requires including in total income any payment the taxpayer benefits from directly or indirectly.
For anyone with many transactions in foreign currencies, it is advisable to consult a lawyer specialized in tax and commercial matters to settle the method of conversion.
Practical example
The branch of a foreign company in Riyadh received USD 100,000 from a customer for a service performed on 15 March. The amount is converted to riyals for tax purposes at the exchange rate announced by the Saudi Arabian Monetary Authority on the date of the transaction.
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 30 of the Saudi Income Tax Law
In what currency is income tax calculated in Saudi Arabia?
Total income and the tax base are calculated in Saudi riyals.
What exchange rate is used to convert foreign-currency income?
The exchange rate announced by the Saudi Arabian Monetary Authority on the date of the transaction.
Is the year-end rate used for conversion?
The text sets the exchange rate on the date of the transaction, not on another date.
More articles on Tax Accounting Rules
- Article 22
The article sets the tax year as the State's fiscal year, allows using another twelve-month period under the Regulations, and deals with changing the year and with groups of related companies.
أ - السنة الضريبية هي السنة المالية للدولة . ب - يجوز للمكلف استخدام فترة اثني عشر شهرا مختلفة عما ورد في الفقرة (أ) من هذه المادة كسنة ضريبية وفقا للضوابط التي
- Article 23
The article requires the taxpayer to use an accounting method that shows his income clearly, states when the cash or accrual basis is used, and requires the Authority's approval to change accounting policy.
أ - يجب أن تبين طريقة المحاسبة التي يتبعها المكلف دخله بوضوح . ب - يحدد إجمالي الدخل والمصاريف للشركة المقيمة ولأي مكلف يحتفظ أو ملزم نظاما بالاحتفاظ بالدفاتر ا
- Article 24
The article provides that a person using the cash basis records income when it is received or when it is ready to be received, and expenses when they are paid.
يدون المكلف الذي يستخدم الأساس النقدي في دفاتره وسجلاته الدخل المستلم عند استلامه أو عندما يكون جاهزا للاستلام ، والمصاريف المسددة عند دفعها.
- Article 25
The article provides that a person using the accrual basis records income and expenses when they fall due, and sets when an amount becomes payable to or by the taxpayer.
أ - يدون المكلف الذي يستخدم مبدأ الاستحقاق الدخل والمصاريف عند استحقاقها . ب - يصبح المبلغ واجب الدفع إلى المكلف إذا حق للمكلف استلامه حتى لو تأجل التسديد أو تم
- Article 26
The article provides that, for a person using the accrual basis, income and expenses of long-term contracts are calculated by the proportion of work completed during the year, and defines a long-term contract.
أ - يحتسب الدخل والمصاريف المتعلقة بعقد طويل الأجل للمكلف الذي يستخدم مبدأ الاستحقاق على أساس نسبة العمل المنجز خلال السنة الضريبية . ب - تحدد نسبة العمل المنجز
- Article 27
The article requires anyone holding inventory to keep stocktaking records, allows deducting the cost of goods sold, and sets how it is calculated and how closing stock is valued at the lower of cost or market.
أ - على المكلف الذي يحتفظ بمخزون ، فتح سجلات جرد له والاحتفاظ بتلك السجلات. ب - تحسم تكلفة البضاعة المباعة خلال السنة الضريبية . ج - تتحدد تكلفة البضاعة المباعة
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.