A. For purposes of income tax, any Person engaged in a Controlled Transaction shall conduct such transaction under Terms that are similar to Comparable Transactions between Independent Persons.
B. A Controlled Transaction shall be considered to be conducted on an Arm’s Length basis if the Terms of such Controlled Transaction are materially similar to the Terms of a Comparable Transaction between Independent Persons.
C. The tax base of a Permanent Establishment in the Kingdom shall be determined according to the Arm’s Length Principle. Subject to the provisions of the relevant International Taxation Agreement to which the Kingdom is a Party, expenses that may be deducted from the tax base of a Permanent Establishment shall be determined in accordance with the Chapter 5 of the Law.
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