On 7 July 2022, amendments were passed by the House of Representatives to the Income Tax Law (‘the Law’).
As per the new provisions of the Law, an increased deduction of 20% will be granted on the actual expenditure for scientific research as well as research and development, as recognized on the basis of the international accounting standards. The above is applicable on expenditure that will be incurred during the years 2022, 2023 and 2024 by a person carrying on a business and who has the economic ownership of the intangible asset that results or may result from incurring such expenditure.
The increased deduction will also be granted in the cases where the expenditure that will be incurred will be of a capital nature and capital allowances will be claimed on the said expenses.
It should be noted that the increased deduction cannot be claimed in the cases where a deduction will be claimed on the
qualifying profits that are generated by a qualifying intangible asset based on the provisions of section 9(k) of the Law.
We, at KSA, remain at your disposal for any clarifications you might need.