Article 17 - Adjustments in Respect of Gains from the Disposal of Immovable Property Located in the Kingdom

Where a Constituent Entity located in the Kingdom derives a net gain from the disposal of immovable property located in the Kingdom to entities other than Group Entities, the Filing Constituent Entity may elect to adjust the Net Constituent Entity Income or Loss in each Fiscal Year in the Look-back Period in accordance with provisions of this Article.

For the purposes of applying the provisions of Paragraph A of this Article, the Look-back Period means the Fiscal Year for which the election is made and the four Fiscal Years prior to that Fiscal Year.

Where the election under Paragraph A of this Article applies, the net gain shall be offset against any net loss of a Constituent Entity located in the Kingdom which is a member of the same Multinational Enterprise Group that arose from the disposal of immovable property located in the Kingdom during the Look-back Period.

The net gain referred to in Paragraph A of this Article, shall be offset against net losses incurred during the Look-back Period in the order in which such net losses occurred.

Where, following the application of Paragraphs C and D of this Article, the net gain is not fully offset by net losses, the remaining net gain shall be spread evenly over the Look-back Period for the purposes of determining the Net Constituent Entity Income or Loss in the Fiscal Years which form part of the Look-back Period.

The election referred to in Paragraph A of this Article is an Annual Election which can be made in accordance with Article 20 of the Law and shall apply to all net gains on immovable property located in the Kingdom derived by Constituent Entities located in the Kingdom which are members of the same Multinational Enterprise Group that arise in the year for which the election is made.

Where an election is made under Paragraph A of this Article, any adjustments which relate to a Fiscal Year preceding the Fiscal Year for which the election is made shall be subject to the provisions of Article 50 of these Regulations.

Where an election is made under Paragraph A of this Article, any Covered Taxes (including deferred tax assets) with respect to any gain that would have been offset in accordance with the provisions of this Article shall be excluded from the computation of Adjusted Covered Taxes in the Fiscal Year in respect of which the election is made.