Minister of Finance Resolution No. (25) was issued on 1/8/1445 AH approving several amendments to a number of articles of the executive regulations of the income tax law issued by Ministerial Resolution No. (1535) dated 6/11/1425 AH, which are summarized as follows:
First: Amending subparagraph (b) of paragraph (2) of Article (9) entitled “Expenses that may be deducted to determine taxable income,” which stipulates:
“Expenses that are permissible to deduct under the income tax law, excluding loan interest expenses. Banks are excluded from applying this equation.”
The paragraph was amended to:
“Expenses are permissible for deduction under the income tax law, excluding the expenses of loan returns. Banks and loan returns used to finance capital assets that are charged to the value of the asset during the construction period are excluded from the application of this equation.”
Second: Amending subparagraph (2) of paragraph (8) of Article (9) entitled “Expenses that may be deducted to determine taxable income,” which stipulates:
“Unfunded liabilities mean: the employer’s liabilities in exchange for his contribution to these funds due for the year in which the deduction is made and which have not been paid until the end of the fiscal year.”
The paragraph was amended to:
“Unfunded liabilities mean: the employer’s liabilities in exchange for his contribution to these funds due as of the beginning of the year in which the deduction was made and which were not paid until the end of that fiscal year.”
Third: Amending Article (60) entitled “Objection and Appeal,” to the following :
“Anyone against whom a decision has been issued by ZATCA may object to it in accordance with what is required by the work rules of the committees for settling tax violations and disputes issued by Royal Order No. (26040) dated 4/21/1441 AH. And any amendments or orders that may occur thereto. ".”
Fourth: Deleting Article (61) and all its paragraphs.
Fifth: Deleting Article (Sixty-Two) and all its paragraphs.
Sixth: Amending Paragraph (1) of Article (Sixty-Three) entitled “Tax Deduction”, to the following text:
A non-resident is subject to tax on any amount he obtains from any source in the Kingdom, and the tax is deducted from the total amount according to the following rates:
Royalty or royalties, payments for technical or consulting services or international telephone communications services paid to the head office or a related company 15%.
Technical or consulting services or international telephone communications services other than what is paid to the head office or to a related company, rent, airline tickets, air or sea freight, distributed profits, loan proceeds, and insurance or reinsurance premium 5%. "
The paragraph was amended to:
A non-resident is subject to tax on any amount he obtains from any source in the Kingdom, and the tax is deducted from the total amount according to the following rates:
Royalty or royalty of 15%.
Technical or consulting services or international telecommunications services. Rent, airline tickets, air or sea freight, distributed profits, loan proceeds, and insurance or reinsurance premium 5%. "
Seventh: Amending Paragraph (4) of Article (Sixty-Three) entitled “Tax Deduction”, which states:
“Payments for air tickets or air or sea freight means: any payments for the purchase of tickets or air or sea freight costs paid in the Kingdom to air or sea transport companies, or to their agents or representatives in the Kingdom, and this does not include amounts paid for shipping goods from abroad.” To the Kingdom's ports
The paragraph was amended to:
“Payments for air tickets or air or sea freight mean: any payments for the purchase of international travel tickets departing from the Kingdom, or air or sea freight costs paid to air or sea transport companies or to their agents or representatives in the Kingdom, and this does not include the amounts paid for shipping goods.” From abroad to the Kingdom’s ports.”
Source: Umm Al-Qura newspaper