Income taxes and zakat decreased during the first quarter of this year by 50.7 percent, to reach about 22.4 billion riyals, compared to about 45.4 billion riyals in the same period last year, which positively affected the company’s results.
Saudi Aramco is subject to a 20 percent income tax rate on exploration and production of non-associated natural gas activities, including gas condensate, in addition to collecting, processing, processing, retailing and transporting associated and non-associated natural gas, its liquids, gas condensate and other associated elements, and is subject to the income tax rate of 50 Percent on all other activities, according to the income tax system.
Starting from January 1, 2020, the tax rate applied to the company’s refining and processing activities has been reduced from 50 percent applicable to eligible domestic oil and hydrocarbon production companies to the general corporate tax rate of 20 percent applied to similar local refining and marketing companies, according to the regulation Income tax.
The new price is conditional on the company separating its refining, processing and marketing activities under the control of one or more fully separate subsidiaries before December 31, 2024, otherwise the refining, processing and marketing activities of the company will be subject to tax retroactively at a rate of 50 percent, and the company expects to transfer all refining activities And its processing and marketing to a separate legal facility during the specified period.
During the second quarter, the income tax on the company was amended, whereby the shares owned directly or indirectly for people working in the production of oil and hydrocarbons in the resident capital companies listed on the Saudi Stock Exchange “Tadawul” were exempted from applying corporate income tax.
As a result, the company’s shares in “SABIC”, “Petro Rabigh”, “Bahri” and “Electricity” companies are now subject to zakat, and zakat is levied on the basis of adjusted income subject to zakat or the Zakat base, in accordance with the regulations of the General Authority for Zakat and Income in the Kingdom, whichever is higher. .
Zakat is calculated using the Zakat base and the zakat provision is charged to the summary income statement. According to Aramco’s lists, the income tax and zakat expense is mainly based on the income generated in Saudi Arabia.
Economic Reports Unit