GTL Summary:

Article 10 of the KSA Income Tax Law outlines specific categories of income that are exempt from taxation. This includes capital gains from the disposal of securities traded on the Kingdom's financial market, extending to securities traded abroad if also listed locally. The exemption also applies to gains from the sale of property not used in business activities. Additionally, distributions, whether cash or in-kind, from a capital company's investments are exempt, provided the resident company holds at least a 10% share in the investee for a minimum continuous period of one year before the distribution.

Document Type: Tax Law Article
Law: Income Tax Law (Royal Decree No M/1 - 21 Feb 2004)
Article Number: 10
Country: 🇸🇦 KSA
Location: Chapter 4 - Taxable Income
Order: 10
Last updated at: 2025-12-19 09:23:03 UTC

Chapter 4 - Taxable Income

Article 10 - Tax-Exempt Income

The following types of income are exempt from income tax:

  1. [Capital gains realized from the disposal of securities traded in the financial market in the Kingdom, and those in a financial market outside the Kingdom if such securities are traded in the financial market in the Kingdom, regardless of whether such disposal was executed through a financial market in the Kingdom or outside it, or through any other means, in accordance with the rules prescribed by the Regulations.] [16]

  2. Gains resulting from the disposal of property other than assets used in the activity.

  3. [Cash or in-kind distributions due from the resident or non-resident capital company's investments whenever the following conditions are met:

    1. The resident capital company's contribution in the investee company's share capital should not by less than 10%.

    2. The minimum period of ownership for the company's contribution mentioned in paragraph (c) of clause (1) of this article should not be less than one year.] [17]

Footnotes

[16]Amended by RD No M/131 dated 29/12/1438H (20 September 2017) with effect from 1 January 2018. Prior to the amendment, the clause read as follows:
'Capital gains realized from disposal of securities traded in the stock market in the Kingdom in accordance with restrictions specified in the Bylaws'

[17]Inserted by RD No M/131 dated 29/12/1438H (20 September 2017) with effect from 1 January 2018.

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