JEDDAH, 13 January 2004 — Saudi Arabia yesterday approved a new income tax bill which cuts the tax rate on foreign investors from 45 to 20 percent in another move to attract badly needed foreign capital to strengthen the economy.
“The Council of Ministers, chaired by Custodian of the Two Holy Mosques King Fahd, approved the new income tax law,” the Saudi Press Agency reported, quoting Culture and Information Minister Dr. Fouad Al-Farsy.
The minister said the lower tax would be imposed on foreign companies and individuals, excluding citizens of GCC countries, who do business in the Kingdom.
Companies set up with capital from non-Saudi shareholders; non-Saudi residents doing business in the Kingdom; individuals who are not living in the Kingdom but do business here through a permanent firm are all liable for the lower tax under the new law.
It will also be imposed on non-resident individuals who have a taxable income from the Kingdom’s resources as well as on investors in gas projects, set at 30 percent, and those in the oil and hydrocarbon sectors — at 85 percent.
Al-Farsy said the new tax law will come into effect 90 days after its publication in the official gazette and will replace the existing 48-year-old income tax law.
The Cabinet meeting also reviewed the situation in both Palestine and Iraq, and condemned Israel for building a dividing wall to cut itself off from the West Bank.
