Subcontractor is any third party, provider or beneficiary in any way that executes a portion of the contract or any phase thereof and is responsible for that portion or stage.

First: For approval of this item the following conditions apply:

1. The work performed by the subcontractor should be related to the main contract.

2. The cost of the subcontractor works should not exceed revenues for such works.

3. Availability of the necessary documents (e.g. the contract, invoices, and settlement documents).

4. In the event that the Incorporated Body implementing the contract sells or assigns it to the subcontractor or any other party, official written approval from the contracting body should be provided.

5. In the event that the subcontractor sells or assigns the contract to another subcontractor, official written approval from the contracting body and the Incorporated Body implementing the contract should be provided.

Second: During the inspection, the Tax Department shall disallow the amounts paid to subcontractors if the Incorporated Body does not notify the Tax Department of the subcontractors or does not withhold 5% of the contract value signed with the subcontractor as income tax retention.

Third: Special and exceptional cases relating to subcontractors shall be treated separately after consulting the Tax Department in this regard.