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In a historic decision the Saudi government on 27 March announced that the income tax rate on its state-owned oil giant, Saudi Aramco, would be drastically cut from 85% to 50%.
In cutting the income tax paid on the company’s profit, the government has put to bed months of speculation, and provided long-awaited transparency on an issue that will have critical importance in determining the success of the 5% share listing of Aramco scheduled for late-2018.
The new rate is effective retroactively from 1 January 2017. As well as income tax, Aramco currently pays a 20% royalty on revenue, a fee that was left unchanged by the announcement. (CONTINUED - 1156 WORDS)