The following words and phrases, wherever mentioned in this Law, shall have the meanings next to them unless the context requires otherwise:

The Minister:                  Minister of Finance

The Department:            Department of Zakat and Income.

Tax:                                  Income tax imposed in accordance with this Law.

Person:                            Any natural or corporate person.

Taxpayer:                       Any person subject to tax in accordance with this Law.

Activity:                        A commercial activity in all its forms, or any vocational, professional or other similar activity for profit. This includes the use of movable and immovable property.

Royalties:                         Payments received for use of or the right to use intellectual rights, including, but not limited to, copyright, patents, designs, industrial secrets, trademarks and trade names, know-how, trade and business secrets, goodwill, and payments received against the use of information related to industrial, commercial or scientific expertise, or against granting the right to exploit natural and mineral resources.

The Kingdom:                 Lands and territorial waters of the Kingdom of Saudi Arabia, its air space and its rights in the zone divided between it and the State of Kuwait. This includes marine or semi-marine areas that are under the sovereignty, sovereignty rights or jurisdiction of the Kingdom in accordance with International Law.

Capital company:            A joint stock company, a limited liability company, or a company limited by shares. For purposes of this Law, investment funds shall be considered capital companies.

Partnership:                     A general partnership, a silent partnership, or a limited        partnership.

Resident:                                      A natural person, a company that satisfies the residency conditions stipulated in Article Three of this Law, any governmental department or ministry, or public entity, or any other corporate person or entity formed in the Kingdom.

Nonresident:                   Any person who does not satisfy the requirements of the status of a resident.

Saudi citizen:                  A person holding Saudi nationality or who is treated as such.

Commercial books:         Set of commercial books kept by the taxpayer in which all commercial transactions are recorded as described by Royal Decree No. (M/61) dated 17/12/1409H and its implementing regulations issued by Ministerial Decision No. (699) dated 29/7/1410H, amended by Ministerial Decision No. (1110) dated 24/12/1410H or any subsequent amendments.

Regulations:                    Implementing regulations of this Law.                    

Any word or phrase with no specific definition in this Chapter shall have the same definition it has in other Laws applicable in the Kingdom provided that such definition is not inconsistent with the provisions of this Law.