Defines the payroll and tangible-asset carve-out and the transitional percentages that decline to steady-state rates.
What should you do now?Use the percentage for the fiscal year's start, not the filing year, and calculate payroll and assets separately.
What does the official Article provide?
The official source is Arabic. This English commentary is explanatory and is not presented as an official translation.
Defines the payroll and tangible-asset carve-out and the transitional percentages that decline to steady-state rates.
This is a verified summary rather than a verbatim reproduction. Consult the official Arabic text, the Law and later decisions before making a final determination.
What does the Article mean in plain language?
The substance exclusion combines a percentage of eligible payroll with a percentage of eligible tangible-asset value. Rates depend on the Fiscal Year's starting year: 9.4% and 7.4% respectively for years starting in 2026, declining under the schedule to 5% each from 2033. Establish eligibility under Articles 47 and 48 first. The exclusion affects excess profit under the Law, rather than reducing the effective tax rate.
Tax, accounting and financial-modelling teams responsible for the final computation.
Use the percentage for the fiscal year's start, not the filing year, and calculate payroll and assets separately.
How can the rule appear in practice?
For a fiscal year beginning in 2025, the prescribed transitional percentages apply; the final 5% rate does not apply automatically.
This illustration is not an NBR case or a binding outcome for a particular fact pattern.Using filing-year rates instead of the Fiscal Year's starting year or including all payroll and assets.
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Is this Article enough on its own?
Usually not. Read it with the connected Law Article, definitions, any effective election and current NBR guidance, especially for an amount or deadline.
Does NBR guidance replace the Regulations?
No. Guidance explains application and supports procedures and examples, but current legislation and decisions prevail in case of inconsistency.