Taxes paid by Saudi oil and hydrocarbon producers with capital investments exceeding SAR 375 billion will be lowered to 50 percent rather than 85 percent, according to a new royal decree issued Monday.
Under the new policy, national oil firm Saudi Aramco will pay an income tax rate of 50 percent. The royal decree is retroactive to January 1 for the state-run oil giant.
Meanwhile, the income tax rate for investments between SAR 300 billion and up to SAR 375 billion will be set at 65 percent.
Companies with investments between SAR 225 billion and SAR 300 billion will pay a 75 percent income tax, while investments less than SAR 225 billion will pay an income tax of 85 percent.
Capital investments refer to a firm's capital or fixed assets— such as manufacturing plants, equipment that is used for production, as well as oil exploration costs— all before depreciation and amortization.
The latest decision to cut taxes on Saudi Aramco will help bring the oil producer closer to international standards, chief executive officer Amin Nasser said in a statement seen by Argaam.
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