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Document Type: Tax Law Article
Law: Income Tax Law (Royal Decree No M/1 - 21 Feb 2004)
Article Number: 40
Country: 🇸đŸ‡Ļ KSA
Location: Chapter 8 - Taxation Rules of Partnerships
Order: 40

Article 40 - Transfer of Property to a Partnership

Article 40 - Transfer of Property to a Partnership

Chapter 8 - Taxation Rules of Partnerships

Article 40 - Transfer of Property to a Partnership

  1. No gain or loss shall be calculated for the transfer of a partner's assets to a partnership against acquiring a share in such partnership.

  2. The partner is considered an owner of a share in the partnership equal to the difference between the value of the asset transferred by him to the partnership according to market prices and the amount paid to him. If the amount paid to him exceeds the market price, the excess amount shall be considered a distribution to the partner by the partnership.