Article 50 of the Saudi Income Tax Law
المادة 50 من نظام ضريبة الدخل · الفصل العاشر: ضريبة استثمار الغاز الطبيعي
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 مبلغ ضريبة الدخل الذي يدفعه المكلف عن وعاء ضريبة استثمار الغاز الطبيعي طبقا للفقرة ( أ ) من هذه المادة من ضريبة استثمار الغاز الطبيعي المستحقة عليه.
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 50 explained in plain English
This article regulates the relationship between income tax and the natural gas investment tax for the same taxpayer.
(a) Application of income tax: Income tax is applied under paragraph (b) of Article 7 to the natural gas investment tax base of the taxpayer subject to this tax. Paragraph (b) of Article 7 provides that the tax rate on the tax base of a taxpayer working in natural gas investment is twenty percent (20%).
(b) Preventing double taxation: The amount of income tax the taxpayer pays on this base is deducted from the natural gas investment tax due from him. The taxpayer therefore does not pay both taxes in full on the same base; rather, the income tax paid is treated as part of the gas investment tax due.
The steps in practice:
- Income tax is calculated at 20% on the gas investment tax base.
- The natural gas investment tax due from the taxpayer is calculated.
- The income tax paid is deducted from the gas investment tax due.
Article 49 makes the income tax and gas investment tax actually paid deductible items when calculating cash flows. Article 51 makes the gas investment tax base separate for each contract and from other activities. To estimate the actual burden in a particular case, it is advisable to consult a lawyer specializing in tax and zakat.
Practical example
A gas company has a tax base of SAR 100 million, so income tax at 20% is calculated on it, which is SAR 20 million. If the gas investment tax due from it is SAR 30 million, the income tax it paid is deducted from it, leaving SAR 10 million of gas investment tax due.
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 50 of the Saudi Income Tax Law
Are gas companies subject to income tax in addition to the gas investment tax?
Yes. Income tax is applied under paragraph (b) of Article 7 at 20% on the gas investment tax base, but what is paid of it is deducted from the gas investment tax due.
Does a gas company pay both taxes in full?
No. The amount of income tax paid on the gas investment tax base is deducted from the gas investment tax due from it.
Articles this article refers to
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 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
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.