Article 49 of the Saudi Income Tax Law
المادة 49 من نظام ضريبة الدخل · الفصل العاشر: ضريبة استثمار الغاز الطبيعي
The article explains how annual cash flows are calculated by adjusting the natural gas investment tax base, adding back certain items and deducting others.
Official text (Arabic)
This article has not been amended since the law was issued.
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 - إعادة إدراج البنود غير النقدية المحسومة لغرض تحديد الوعاء الضريبي للمكلف .
ج - إعادة إدراج جميع رسوم التمويل وأي خدمة بنكية أخرى .
د - حسم المصروفات النقدية الرأسمالية باستثناء رسوم التمويل أو أي خدمات بنكية أخرى .
هـ - حسم ضريبة استثمار الغاز الطبيعي وضريبة الدخل على الشركات التي تم دفعها فعلا.
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 49 explained in plain English
Article 48 sets the rate of the natural gas investment tax according to the internal rate of return on cumulative annual cash flows. This article explains how those annual cash flows are calculated: starting from the natural gas investment tax base and then adjusting it.
What is added back (added):
- (a) Operating losses carried forward from previous years.
- (b) Non-cash items that were deducted to determine the taxpayer's tax base.
- (c) All financing charges and any other bank services.
What is deducted (subtracted):
- (d) Cash capital expenditures, except financing charges or any other bank services.
- (e) The natural gas investment tax and the corporate income tax actually paid.
The idea is that the tax base is an accounting figure, while the internal rate of return needs actual cash figures. Therefore non-cash items, carried-forward losses and financing costs are added back, and cash capital expenditures and taxes paid are subtracted.
This article is linked to Article 50, which applies income tax under paragraph (b) of Article 7 to the gas investment tax base and deducts the income tax paid from the gas investment tax due. To apply these adjustments in practice, it is advisable to consult a lawyer specializing in tax and zakat or a certified accountant.
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 49 of the Saudi Income Tax Law
How are annual cash flows calculated for the gas investment tax?
By adjusting the gas investment tax base: adding back carried-forward losses, non-cash items and financing charges, and deducting cash capital expenditures and taxes actually paid.
Are financing charges added back when calculating cash flows?
Yes. All financing charges and any other bank services are added back, and they are not counted within the capital expenditures deducted.
Are taxes that are due but unpaid deducted?
The text deducts the natural gas investment tax and the corporate income tax that were actually paid.
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 46
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.
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 وا
- 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 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.