Riyadh - Companies investing more that 375 billion riyals ($100 billion) will be subject to a 50-percent tax rate
Published: Mon 27 Mar 2017, 5:58 PM
Updated: Mon 27 Mar 2017, 8:05 PM
Saudi Arabia on Monday cut taxes on oil companies in a major move that could attract investments in its energy giant Aramco, expected to be offered to investors in 2018.
A new set of income tax rates on oil companies working in the kingdom has been decreed. It is to range from 50 percent to 85 percent depending on the firms' investments, after it was 85 percent across the board.
The royal decree published Monday said companies investing more that 375 billion riyals ($100 billion) will be subject to a 50-percent tax rate.
"Saudi Aramco's tax rate is reduced from 85 percent to 50 percent, bringing it in line with international benchmarks," the government-owned oil giant said on its Twitter account following the decree.
Saudi Arabia plans to sell five percent of Aramco next year, as part of efforts to build up a large sovereign wealth fund. The sale falls within the kingdom's strategy to diversify its oil-dependent economy away from hydrocarbons.
"The royal decree concerning taxes is in the interest of the kingdom, its citizens and future generations," said Energy Minister Khalid Al-Falih, whose country is the world's biggest oil exporter.
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