Article 46 of the Saudi Income Tax Law
المادة 46 من نظام ضريبة الدخل · الفصل العاشر: ضريبة استثمار الغاز الطبيعي
The article defines income from natural gas investment as the gross income from selling the gas, its liquids, condensates and products, and any incidental or non-operating income linked to the main activity.
Official text (Arabic)
This article has not been amended since the law was issued.
الدخل الناتج من العمل في مجال استثمار الغاز الطبيعي ، هو إجمالي الدخل المتحقق من بيع أو تبادل أو تحويل الغاز الطبيعي وسوائله ومكثفات الغاز بما في ذلك الكبريت والمنتجات الأخرى، وأي دخل آخر يحصل عليه المكلف من دخل عرضي أو غير تشغيلي مرتبط بنشاطه الرئيس مهما كان نوعه ومصدره، بما في ذلك الدخل المتحقق من استغلال طاقة فائضة في أحد مرافق أوجه النشاط الخاضعة لضريبة استثمار الغاز الطبيعي .
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 46 explained in plain English
This article sets out what counts as income arising from working in natural gas investment, which is the starting point for calculating the tax.
This income includes:
- The gross income from selling, exchanging or converting natural gas, its liquids and gas condensates, including sulfur and other products.
- Any other income the taxpayer obtains from incidental or non-operating income linked to its main activity, whatever its type and source.
- Income from using surplus capacity in a facility of the activities subject to the natural gas investment tax.
The definition is broad. It is not limited to selling the gas itself but extends to accompanying products such as sulfur, and to incidental income as long as it is linked to the main activity. The condition for incidental or non-operating income is that it is linked to the taxpayer's main activity.
This definition rests on Article 45, which sets out what counts as working in natural gas investment. Article 47 then makes the tax base this gross income after deducting deductible expenses, including royalty and surface rent amounts.
To determine whether a particular item of income is linked to the main activity, it is advisable to consult a lawyer specializing in tax and zakat.
Practical example
A gas company in the Eastern Province sells processed gas, sells the sulfur produced by processing, and leases surplus capacity on one of its lines to another company. All of these amounts fall within the gross income arising from working in natural gas investment under this article.
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 46 of the Saudi Income Tax Law
Does the sale of sulfur count as natural gas investment income?
Yes. The text provides that the income includes the sale of gas, its liquids and condensates, including sulfur and other products.
Is a gas company's incidental income subject to this tax?
Yes, if it is incidental or non-operating income linked to the taxpayer's main activity, whatever its type and source.
Does leasing surplus capacity in gas facilities count as income?
Yes. The income includes what is earned from using surplus capacity in a facility of the activity subject to the gas investment tax.
More articles on Natural Gas Investment Tax
- Article 44
The article imposes a tax called the natural gas investment tax on anyone engaged in investing in natural gas, its liquids and its condensates within the Kingdom, its exclusive economic zone or its continental shelf.
تفرض على كل شخص يعمل في مجال استثمار الغاز الطبيعي وسوائله ومكثفات الغاز داخل المملكة أو منطقتها الاقتصادية الخالصة أو جرفها القاري ضريبة تسمى ضريبة استثمار الغ
- Article 45
The article defines working in natural gas investment, what is meant by gas transport and what it excludes, and what is meant by gas condensates, for the purposes of the natural gas investment tax.
أ - يقصد بالعمل في مجال استثمار الغاز الطبيعي أعمال التنقيب عن الغاز الطبيعي وإنتاجه وتجميعه وتنقيته ومعالجته ، وتجزئة سوائل الغاز الطبيعي، وإنتاج وتجميع مكثفات
- Article 47
The article sets the base of the natural gas investment tax as the gross income in Article 46 after deducting deductible expenses, and treats royalty and surface rent as deductible.
وعاء ضريبة استثمار الغاز الطبيعي هو إجمالي الدخل المشار إليه في المادة السادسة والأربعين من هذا النظام مخصوما منه المصاريف جائزة الحسم بموجب هذا النظام ، وتعتبر
- Article 48
The article ties the rate of the natural gas investment tax to the internal rate of return on the taxpayer's cumulative annual cash flows, under a table that starts at 30% and ends at 85%.
يحدد سعر ضريبة استثمار الغاز الطبيعي عن أية سنة ضريبية وفقا لمعدل العائد الداخلي للتدفقات النقدية السنوية التراكمية للمكلف المستمدة من نشاط استثمار الغاز الطبيع
- Article 49
The article explains how annual cash flows are calculated by adjusting the natural gas investment tax base, adding back certain items and deducting others.
يتم حساب التدفقات النقدية السنوية عن طريق تعديل وعاء ضريبة استثمار الغاز الطبيعي كما يلي : أ - إعادة إدراج الخسائر التشغيلية المرحلة من السنوات السابقة . ب - إع
- Article 50
The article applies income tax at 20% under paragraph (b) of Article 7 to the gas investment tax base, and then deducts the income tax paid from the gas investment tax due.
أ - تطبق ضريبة الدخل وفقا للفقرة (ب) من المادة السابعة من هذا النظام على وعاء ضريبة استثمار الغاز الطبيعي للمكلف الخاضع لضريبة استثمار الغاز الطبيعي . ب - يحسم
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.