Ministerial Resolution No. 1535 of 2004 [Executive Bylaws]
Executive Regulations of the Income Tax System
Issued by Ministerial Resolution No.(1535) and the date 1425/6/11 AH And subsequent amendments thereto by ministerial decisions, the latest of which is Decision No.(2568) and the date 1440/8/12 AH.
Article 1 - Basic Provisions
[The provisions of the Income Tax Law shall apply to resident capital companies with respect to the shares owned, directly or indirectly, by non-Saudis, and to shares owned, directly or indirectly, by persons working in the production of oil and hydrocarbons, whether such persons are natural or corporate persons, resident or non-resident.
Shares held by non-Saudi partners in resident capital companies whose shares are listed on the financial market shall not include shares acquired by non-Saudis for the purpose of speculation through trading on the Saudi financial market. Indirect ownership refers to ownership through another entity up to the second level.
The tax base for resident capital companies is calculated independently from the tax base of its shareholders, partners or subsidiary companies even if these are consolidated for accounting purposes. A capital company's share of profits or losses of investments accounted for under equity method shall not form part of the tax base.
The term 'subsidiary companies' refers to companies in which the parent capital company owns more than 50% of their capital, or those in which control is exercised over formation of their Board of Directors.
The provisions of this law shall also apply to non-resident persons, whether natural or corporate, Saudis or non-Saudis, who conduct business in the Kingdom through a permanent establishment (PE) in the Kingdom, or who derive income from sources within the Kingdom.][1]
A non-resident person, who derives income from sources within the Kingdom, without having a permanent establishment therein, shall be subject to tax as follows:
If the income falls under the categories specified under Article 68 of the Law, such income shall be subject to withholding tax as per the provisions of that Article.
If the income represents capital gains resulting from the disposal of fixed or tradeable assets, or from disposal of shares in a resident company, such income shall be subject to tax under the general provisions of the Income Tax Law.
[The provisions of the Income Tax Law shall apply to any natural or legal person, Saudi or non-Saudi, engaged in the investment and transportation of natural gas.][2]