In addition to estimated taxation provisions stipulated under Article 34(a) of the Income Tax Law, the Department may apply estimated taxation to some other activities related to world-wide expenses; this is when the world-wide expenses and local expenses are so interrelated that it is difficult to separate local expenses and so to file separate accounts for local activities.

[The tax base of branches of foreign airlines, land and maritime shipping companies operating in the Kingdom is specified at 5% of the total revenues realized from operations in Kingdom, which includes the total revenues realized from sale of passenger tickets, excess baggage, cargo, post or any other revenues realized from journeys originating in the Kingdom and ending at the final destination agreed between the customer and the carrier company, even if the journey stops at an intermediate station, regardless of where the ticket was sold or travel documents were issued.]^[13]

[Small businesses with limited income, which do not require maintaining books of accounts or records, may be accounted by the Authority on an estimated basis, in accordance with the provisions of Paragraph 4 of this Article.]^[14]

In order to ensure that taxpayers comply with statutory requirements and to reduce instances of tax evasion, the Authority may use estimated taxation based on the taxpayer's relevant facts and circumstances in the following cases:

1. Non-filing of the return during the legally prescribed time. In case of late filing of a return based on statutory books and records before the Authority has issued its estimated assessment, the Authority has the right to accept and process it in accordance with established procedures, while ensuring that any applicable penalties are imposed according to the Regulations.

2. Failure to maintain accurate accounts, books and records within the Kingdom that reflects the true nature and actual operations of the taxpayer.

3. Inability of the taxpayer to prove the accuracy of the information declared in the tax return with supporting documentation, taking into consideration the provisions of Article 57(3).

4. Failure to comply with the required format, forms and manner of books and records as specified in the Commercial Books Regulations.

5. Failure to translate books and records kept in a language other than Arabic into Arabic within a set time after being notified to do so by the Department.

The estimated net profit shall be determined based on facts, available evidence and indicators relevant to the taxpayer's activity, its nature and circumstances. It shall, in no case, be less than the following rates of the taxpayer's income:

Under estimated assessment, no deduction from gross income, such as claims for sub-contractors or similar parties shall be taken into account.

If contracts to supply to the Kingdom include associated work whose value is not clearly specified in the contract, the revenue from each such activity performed within the Kingdom shall be estimated at 10% of the total contract value.

Capital gains from disposal of an asset in cases where no formal accounting records exist with the taxpayer (seller) shall be determined as follows:

1. In case of disposal of financial instruments, such as shares or bonds that are not publicly traded, the sale value of such assets shall be the contract value or the market value, whichever is higher. The capital gain shall then calculated by comparing the sale value so determined against the original cost of the asset.

2. In case of disposal of an interest in a capital company, the sale value of such assets shall be the contract value, the market value or the book value of the company's accounts, whichever is higher. This value shall then be compared with the original cost to determine the capital gain.

3. In case of disposal of an interest in a partnership, the sale value of such assets shall be the contract value or the market value, whichever is higher. The sale value shall then be compared with the original cost to determine the capital gain.

4. In other cases, the sale value shall be the contract value or the market value, whichever is higher. The sale value shall be compared with the cost base to determine the capital gain, which should not be less than 15 percent of the original cost.

5. [The seller must notify the Authority of the sale and pay the taxes due on capital gains within 60 days from the date of the sale. The purchaser shall be jointly responsible with the seller for settlement of any consequential dues to the Authority.]^[15]