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Document Type: Tax Law Article
Law: Income Tax Law (Royal Decree No M/1 - 21 Feb 2004)
Article Number: 38
Country: 🇸đŸ‡Ļ KSA
Location: Chapter 8 - Taxation Rules of Partnerships
Order: 38

Article 38 - Cost Base of the Partner's Share

Article 38 - Cost Base of the Partner's Share

Chapter 8 - Taxation Rules of Partnerships

Article 38 - Cost Base of the Partner's Share

  1. The cost base of a partner's share in a partnership shall be determined by the amount the partner pays against his share plus the cost base of properties he contributed to the company.

  2. The cost base increases by the amount of a partner's share in a partnership's income (along with his exempt income) included in the partner's gross income.

  3. The cost base decreases, but not below zero, by the cost of distributions from the partnership to the partner, and by the partner's share of partnership losses, and the partnership's expenses and non-deductible expenses, except for capital items.

  4. Debt incurred by the partnership, including debt against its properties, increases each partner's cost base according to his share in the partnership. Debt incurred by some partners in the partnership, in their personal status, shall increase the cost base for these partners only.