The Saudi government is expected to cut the tax rate on foreign company profits from 45% to 25% after a proposal to that effect was approved by the Shura consultative council earlier this week.
The measure now awaits the endorsement of the council of ministers following the 120 member appointed house's approval of the proposal after months of debate. During this process, a proposal to impose a 10% levy on foreign workers earnings above 3000 riyals ($800) per month was rejected by the council.
The law will also stipulate a maximum 85% taxation limit on gas and hydrocarbon projects, from which foreign firms have been traditionally prevented from participating.
The new legislation additionally offers tax breaks on R&D spending and geological survey costs.
According to recent reports, the Saudi authorities are currently negotiating with eight foreign oil firms on three huge natural gas contracts, representing some $25 billion of potential investment. Although reports have suggested that one of the projects has been shelved, the other two are in the latter stages.
http://www.gulf-daily-news.com/Articles.asp?Article=50310&Sn=BUSI
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