Royal Decree No. M/70 dated 28 March 2018 (11-7-1439H) has been issued based on Saudi Arabia’s Council of Ministers’ resolution No. 369 dated 27 March 2018 (10-7-1439H) regarding investments in natural gas.
Under the law following changes are includes:
- Cancellation of ITL Chapter 10, “Natural Gas Investment Tax.” The relevant provisions of Chapter 10 have now been brought under relevant Articles of the ITL.
- Taxable activities of natural gas investment companies will now be subject to Corporate Income Tax (CIT) at a rate of 20%, and not 30% as per the original law.
- Persons engaged in both production of oil and hydrocarbons, and natural gas are required to compute the tax bases of each of these activities independently and claim the related deductible expenses. Similarly, carried forward net operating losses of an activity can be offset against the same activity’s taxable profit.
