Article 43 - Exclusion of Adjusted Covered Taxes from the Effective Tax Rate Calculation

For the purposes of Paragraph A of Article 8 of the Law, to the extent applicable, the following Adjusted Covered Taxes shall be excluded from the computation of the Effective Tax Rate for Constituent Entities located in the Kingdom:

1. Any amount of Covered Taxes of a Constituent Entity-owner subject to a Controlled Foreign Company Tax Regime that are allocable under Paragraph C of Article 29 of these Regulations to a Constituent Entity located in the Kingdom.

2. Any amount of Covered Taxes of a Main Entity that are allocable under Paragraph A of Article 29 of these Regulations to a Permanent Establishment located in the Kingdom, other than [Covered Taxes arising from tax] imposed under any other law in the Kingdom.

3. Any amount of Covered Taxes of a Constituent Entity-owner on income of a Hybrid Entity that is allocable under Paragraph D of Article 29 of these Regulations to a Hybrid Entity located in the Kingdom.

4. Any amount of Covered Taxes incurred in respect of Passive Income under Paragraph E of Article 29 of these Regulations.

5. Any amount of Covered Taxes of a Constituent-Entity Owner imposed by the Kingdom that is allocable under Paragraph G of Article 29 of these Regulations to a Constituent Entity located in the Kingdom, unless such Covered Taxes relate to withholding tax imposed under any other law in the Kingdom.