SAUDI ARABIA cut taxes on foreign investors, but details of the reforms have been slow to emerge. The reforms may not be as generous as first thought.

Saudi companies have been subject to income tax at rates up to 45%, but only to the extent the earnings belong to foreign shareholders. Business profits accruing to Saudi nationals are subject solely to a religious wealth levy, or zakat. Most industrial projects qualified for tax holidays of up to 10 years. Tax losses could not be carried forward.

The government said recently it planned to reduce the corporate tax rate to 30% and to allow losses to be carried forward until fully absorbed. However, it now appears any tax rate reduction will be in the form of rebates. No details have been released about the timing or procedure for claiming rebates. Tax holidays have been abolished. Existing holidays will reportedly be allowed to be carried to full term. Companies will be allowed to carry losses forward, although this may be subject to conditions. Until the details are published, they remain subject to further change.