Saudi cuts taxes on oil firms ahead of Aramco sale

Riyadh: audi Arabia on Monday cut taxes on oil companies in a major move that could attract investments in its energy giant Aramco, expected to be offered to investors in 2018.

King Salman decreed a new set of income tax rates on oil companies working in the kingdom, to range from 50 percent to 85 percent depending on the firms´ investments, after it was 85 percent across the board.

The royal decree published Monday said companies investing more that 375 billion riyals ($100 billion) will be subject to a 50-percent tax rate. "Saudi Aramco´s tax rate is reduced from 85 percent to 50 percent, bringing it in line with international benchmarks," the government-owned oil giant said on its Twitter account following the decree.

Saudi Arabia plans to sell five percent of Aramco next year, as part of efforts to build up a large sovereign wealth fund. The sale falls within the kingdom´s strategy to diversify its oil-dependent economy away from hydrocarbons.