Article 53 of the Saudi Income Tax Law
المادة 53 من نظام ضريبة الدخل · الفصل العاشر: ضريبة استثمار الغاز الطبيعي
The article exempts companies producing oil, or oil and gas together, from the provisions of the natural gas investment tax chapter in respect of their activity in the area of operations or concession defined when the Law took effect.
Official text (Arabic)
This article has not been amended since the law was issued.
لا تسري أحكام هذا الفصل على أي شركة تشتغل بإنتاج الزيت، أو بإنتاج الزيت والغاز الطبيعي معا، فيما يتعلق بأوجه نشاط تلك الشركة في منطقة عملياتها أو منطقة امتيازها المحددة عند سريان هذا النظام.
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 53 explained in plain English
This article creates an exception to the provisions of Chapter Ten on the natural gas investment tax.
Who does the exception cover? Any company that:
- is engaged in oil production, or
- is engaged in producing oil and natural gas together.
Scope of the exception: It does not cover all the company's activity, but is limited to its activities in its area of operations or concession area, provided that this area is the one defined when this Law took effect. The geographic limit is fixed as of the date the Law took effect.
Effect: The provisions of this chapter, that is, the provisions of the natural gas investment tax, do not apply to these activities. The text does not itself state what applies to them instead, and does not address the treatment of the company's activity outside that area.
This article comes after Article 52, which subjects income from processing or fractionating gas in a licensed independent plant, and from transporting it for others in a licensed independent pipeline, to income tax under paragraph (b) of Article 7. Article 54 then provides that paragraph (c) of Article 7 does not apply to the natural gas investment tax base of any taxpayer subject to it.
To determine whether a particular activity falls within the concession area defined when the Law took effect, it is advisable to consult a lawyer specializing in tax and zakat.
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 53 of the Saudi Income Tax Law
Are oil-producing companies subject to the natural gas investment tax?
The provisions of this chapter do not apply to a company engaged in producing oil, or oil and gas together, in respect of its activity in its area of operations or concession defined when the Law took effect.
Does the exception cover an oil company's activity outside its concession area?
The text limits the exception to activities in the area of operations or concession defined when the Law took effect, and does not address what lies outside it.
What is meant by the concession area in this article?
It is the area of operations or concession defined for the company when the Income Tax Law took effect.
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.