The tax base for both resident and non-resident insurance companies engaged in general insurance business in the Kingdom shall be determined in accordance with the provisions of the Income Tax Law.

The tax base for a non-resident insurance company carrying on general insurance business in the Kingdom through a permanent establishment shall be determined as follows:

1. Total Revenues, which include the following:

   1. Total insurance premiums received or receivable from contracts for insurance risks in the Kingdom, less any cancelled premiums and any premiums paid for reinsurance.

   2. Reserve for unearned premiums and unexpired risks as per Article 9 (5/b) of these Regulations, calculated at the end of the previous financial year.

   3. Investment income attributable to contracts for insurance risks in the Kingdom, determined as follows:

      Global investment income × Total Local PremiumsTotal Global Premiums

   4. Any other income attributable to the permanent establishment.

2. Total expenses, which include the following:

   1. Payments paid under insurance policies on properties or risks in the Kingdom, excluding amounts covered by re-insurance.

   2. Unearned premium reserve and outstanding risk reserve, calculated in accordance with paragraph (5/b) of Article 9 of these Regulations, at the end of the current financial year.

   3. Deductible expenses incurred by the permanent establishment in the Kingdom.

   4. The branch's share of general a n d administrative expenses of the company's head-office determined as follows:

      Total General and Administrative expenses of the Head Office × Total Local PremiumsTotal Global Premiums

3. The tax-base of the insurance company under paragraph 2 of this Article should not be less than the proportion of worldwide pre-tax net income from general insurance, which the income from local premiums bears to income from worldwide premiums, as per the consolidated worldwide financial statements.

The tax base of an insurance company that is engaged in life insurance activity in the Kingdom shall be determined as follows:

1. The tax base for a resident insurance company engaged in life insurance is the company's Income from investment, minus administrative expenses related to investment income.

2. The tax base for a non-resident insurance company engaged in life insurance through a permanent establishment in the Kingdom shall be determined as follows:

   Global gross investment income × Total Local PremiumsTotal Global Premiums

   MINUS:

3. The local branch's share of global management expenses related to investment income determined as follows:

   Global management expenses related to investment income × Total Local PremiumsTotal Global Premiums

4. A proportion of the general and administrative expenses of the company's head office, determined as follows:

   Total general and administrative expenses of the head office × Total Local PremiumsTotal Global Premiums

The term "life insurance" means issuance of insurance policies whose proceeds are payable at the end of the contract term or upon the death of the insured person.