SZTAC 76/2021/IR ; 2018/1696/IW

Profits entry to the head office account is not considered a payment of those profits either de facto or de jure. Rather, it is an accounting procedure similar to annual profits recognition under retained earnings within equity.

Background

On Tuesday, 22/09/1442 AH corresponding to 04/05/2021, the First Appellate Circuit of Income Tax Violations and Disputes constituted according to Saudi Arabia Royal Order No. 65474/1439 dated 23/12/1439 AH, held at its headquarters in Riyadh, to consider the appeal brought by ..... Company on 06/06/1438 AH, to challenge the Second Circuit of the First Instance Tax Zakat Objection Committee in Riyadh decision No. (7) of 1438 issued in the tax assessment from 2005-2009 case filed by the appellant against GAZT, in which the Preliminary Decision determined that:

First: To admit in form the objection to the tax assessment from 2005-2009 filed by ………………………. Company, in accordance with the recitals in this decision.

Second: On merits:

To dismiss the taxpayer’s objection to the item of not allowing the deduction of confirmed tax losses by GAZT from 2004 to 2007 against the taxable income for 2009, in accordance with the recitals in this decision.