Arabian cement company saudi joint stock company

ARABIAN CEMENT COMPANY
(Saudi Joint Stock Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2021
41
24. ACCRUED ZAKAT AND INCOME TAX (continued)
c) Zakat and tax status (continued)
The Company has submitted the Zakat returns for the years ended 31 December 2014 to 2020
and obtained the unrestricted Zakat certificate for the year 2020.
The Zakat, Tax and Customs Authority has issued the Zakat and withholding tax assessment
for the two years ended 31 December 2019 and 2020, which showed the total differences in
Zakat and withholding tax due and a delay fine of SR 1.8 million.
The Company has paid the zakat due on the non-objectionable items in the amount of SR 83
thousand, in addition to paying the maximum amount of zakat differences due under the zakat
assessment at 25% according to the Regulations, which amounts to SR 414 thousand. The
Company has submitted an objection on the zakat assessment for the two years mentioned
above, which is still under study by the ZTCA to date.
Qatrana Cement Company (subsidiary) – Jordan
Income tax returns were audited by the Income and Sales Tax Department until the end of 2018.
The Company also filed income tax returns to the Department until the end of 2020.
With regard to sales tax, sales tax returns were audited by the Income and Sales Tax Department
until the end of 2018. The Company also submitted sales tax returns to the Department for the
end of December 2021.
The Income and Sales Tax Department reviewed the income tax for the Company for the year
2014 and issued its initial decisions requesting the Company to pay tax differences resulting
from a difference in the interpretation of the decision of the Investment Board exemptions.
Accordingly, the objection was submitted to the objection committee in the Income Tax
Department. On 21 June 2020, the decision in relation to the objection was issued not to
calculate investment promotion exemption on profits for the year 2014. However, the Company
submitted its objection ag ainst the Department’s decisions, and the files were transferred to the
court to settle the dispute, and the Company did not calculate an additional provision for income
tax as, according to the opinion of the legal advisor that the Company has strong reasons to win
this case. The case is currently under review by the court of first instance.
d) Deferred tax assets and liabilities
Movement on deferred tax assets was as follow:
2021
SR ('000)
2020
SR ('000)
Balance, beginning of the year 27,069 25,444
Additions and amendments during the year 196 1,023
Transferred to the income tax provision (5,315) 602
Balance at end of year 21,950 27,069

ARABIAN CEMENT COMPANY
(Saudi Joint Stock Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2021
42
24. ACCRUED ZAKAT AND INCOME TAX (continued)
d) Deferred tax and liabilities (continued)
The deferred tax assets for the year ended 31 December 2021 were calculated in accordance
with Income Tax Law No. (34) of the year 2014 and its amendments, which came into effect
on 1 January 2019. According to this law, the legal tax rate on the Company is 17%, in addition
to the national contribution rate of 1% (2020: 16% in addition to the national contribution rate
of 1%).