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Monday, 31 July 2017

Saudis Weigh Oil-Price Linked Tax for Aramco Before IPO - Bloomberg

Saudis Weigh Oil-Price Linked Tax for Aramco Before IPO - Bloomberg:

"Saudi Arabia is considering a flexible tax system for state-owned oil company Aramco that would increase royalty payments when crude prices rise, according to people familiar with the deliberations. Riyadh is mulling a proposal from Saudi Aramco to replace the current fixed royalty on revenues, the same people said, asking not to be named discussing government policies. Aramco has proposed to initially set the royalty at 20 percent -- the same rate as today’s fixed rate -- and increase it automatically if oil prices rise significantly. The Saudi government hasn’t yet decided whether to go ahead with the flexible royalty and it could decide against it, one of the people said. On top of the royalty, Saudi Arabian Oil Co., as Aramco is formally known, pays income tax on profit, which the government recently cut to 50 percent from 85 percent."

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