If a partnership fails to file its required information return within the legally prescribed time, or fails to comply with the required return form, it will be subject to a penalty for non-filing. This penalty shall be calculated at 1 percent of the gross income, not exceeding SAR 20,000 (twenty thousand riyals) in accordance with Article 76(a) of the Income Tax Law.

The income of a partnership is not subject to tax. This income is distributed to the partners, each of whom is taxed in their personal capacity. Each partner must file their returns within the legally prescribed time, including all taxable income, including their share of the partnership's income.

In determining the tax base of a partner in a partnership, the partnership's income from sources outside the Kingdom and its exempt income under the Income Tax Law shall retain its character, and that includes gains, fees, losses or debts.

A loss in excess of the partner's cost base is not taken into account (is suspended) until the partner acquires sufficient cost base to offset the loss or until the partner's interest is terminated.

Partnership obligations also apply to a consortium of companies, including those related to registration with the Authority, filing information declarations, and relevant penalties for non-compliance.