1. Update on Saudi Zakat & Income Tax Laws ICAP – KSA Chapter 27 January 2014

2. © 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative. The change over the last decade or so 1 JurisdictionUntil a decade agoNow Saudi Arabia  Majority local ownership required in all businesses  Except for trading, agriculture and real estate, businesses can be a 100% foreign owned  Trading, agriculture and real estate businesses can be up to 75% foreign owned The rest of the GCC  Majority local ownership required in all businesses  Except for free zones (where restricted activities can be carried out), majority local ownership required in all businesses

3. © 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative. Doing business in Saudi Arabia 2 Recent Economy Rankings by the World Bank (covering 189 countries) (Source: http://www.doingbusiness.org/rankings)http://www.doingbusiness.org/rankings  Ease of Doing Business – KSA stands at No. 26  Protecting investors – KSA stands at No. 22  Ease of paying taxes – KSA stands at No. 3

4. © 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative. Upsurge in Saudi budgetary spending over the last few years 3 KSA expenditure budget over the last few years FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 Human Resource Development 56 70 87 96 105 122 137 148 168 Transport & Communications 6 9 10 11 12 15 16 17 21 Economic Resource Development 7 11 12 14 16 22 29 33 36 Health & Social Development 18 23 27 31 34 40 47 52 61 Infrastructure Development 3 3 5 5 6 8 8 9 11 Public Administration and Other 50 52 63 62 63 79 92 94 111

5. © 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative. Upsurge in Saudi business and Zakat / tax over the last few years 4 DZIT revenues over the last few years (Amounts in SR billions)

6. © 2014 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, is a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative. Saudi Zakat & Tax system 5 Areas of improvement  Consistency of approach  Filing exhibits with tax returns even if not applicable  Tax and Zakat payment receipts  Issuance of annual Zakat certificate  DZIT circulars and notifications  Appellate decisions  Fatawa  DZIT Website