1. For the purposes of this Agreement, unless the context requires a different interpretation:

(a)

The term "Contracting State" means, in the context of the Swiss Confederation or the Kingdom of Saudi Arabia;

(b)

The term "air transport enterprise of a Contracting State" means a business carried on by a resident of a Contracting State which is designated by the Air Transport Agreement between Switzerland and the Kingdom of Saudi Arabia ¹ ;

(c)

The term "air transport" means the operational activities relating to the air transport of passengers, livestock, goods and mail carried out by an air transport undertaking of a Contracting State, including sale Tickets or similar documents for transport;

(d)

"International traffic" means any transport by an aircraft which is owned, leased or chartered, and operated by an air transport undertaking of a Contracting State, except where such carriage is made only between points Situated in the other Contracting State;

(e)

The term "competent authority" means:

(i)

With regard to the Swiss Confederation, the Director of the Federal Contributions Administration or his authorized representative;

(ii)

With regard to the Kingdom of Saudi Arabia, the Ministry of Finance and the National Economy;

(f)

The term "person" includes natural persons, corporations or any other group of persons;

(g)

The term "resident of a Contracting State" means any person who, under the law of that State, is liable to tax in that State, by reason of his domicile, residence, place of management or any other criterion of Similar nature.

(2) For the purposes of applying the provisions of this Agreement by a Contracting State, any expression which is not defined therein, unless the context requires a different interpretation, has the meaning assigned to it by the law of that State in respect of Taxes to which this Agreement applies.

(1) This Agreement shall apply to all taxes on income and on capital collected on behalf of a Contracting State, irrespective of the system of collection.

2. Are considered taxes on income and on capital, taxes collected on total income, on total capital, or on items of income or capital, including taxes on gains from the alienation of movable property.

The current taxes to which this Agreement applies include:

(a)

With regard to the Swiss Confederation, federal, cantonal and communal taxes on income and on capital, (hereinafter referred to as "Swiss tax");

(b)

With respect to the Kingdom of Saudi Arabia, income tax, (hereinafter referred to as the "Saudi tax").

(4) This Agreement shall also apply to taxes of an identical or similar nature which would be established subsequently in addition to, or in place of, existing taxes.

(1) Income and profits derived from air transport in international traffic carried out by a business of a Contracting State shall be exempt from taxes in the other Contracting State; this exemption shall also apply to taxes levied on any property Furniture (including aircraft).

2. The provisions of s. 1 shall also apply to the income and profits made by a business of a Contracting State arising from its participation in a pool or a joint undertaking.

3. Within the meaning of this Article, the income and profits realised by an air transport undertaking of a Contracting State in air transport in international traffic shall also include:

(a)

Interest arising from amounts directly generated by the operation of aircraft in international traffic provided that such interest is incidental to that operation;

(b)

The income and profits derived from the rental, charter or maintenance of an aircraft by that person provided that this rental, charter or maintenance is incidental to the operation by that person of an aircraft in International traffic;

(c)

Income and profits derived from training programmes provided by the air transport undertaking of one of the Contracting States to the air transport undertaking of the other Contracting State.

With regard to the taxation of remuneration in respect of employment exercised by an employee of an air transport undertaking of a Contracting State, reference is made to the Agreement signed on 23 June and 28 August 1977 between Saudia and Swissair.

The competent authorities of the Contracting States shall endeavour, by mutual agreement, to resolve the difficulties or doubts which may be caused by the interpretation or application of this Agreement. Each Contracting State may at any time request consultation with a view to amending this Agreement or to discuss its application or interpretation. Such consultation shall commence no later than 60 days after the date of receipt of the application; decisions shall be taken by mutual consent.

This Agreement shall be subject to ratification and shall be the time for an exchange of instruments of ratification.

This Agreement shall enter into force on the day of the exchange of the instruments of ratification and its provisions shall have effect in each of the Contracting States for taxation periods beginning on 1 ^Er January 1975 or after that date. However, the provisions of this Agreement shall apply in both Contracting States, in respect of taxes at source, on amounts paid or credited on 1 ^Er January of the year following the entry into force, or after that date.

This Agreement, comprising seven articles, shall remain in force for an indefinite period, but each Contracting State may denounce it on written notice to the other Contracting State at least six months before the end of one year To which this Agreement shall cease to apply from the end of the calendar year in which the notice was given.

In witness whereof The undersigned, duly authorized, have signed this Agreement and have affixed their seal thereto.

Done in triplicate in Riyadh, on 20 February 1999 in the English, Arabic and French languages, each text being equally authentic. In the event of a difference of interpretation between the French and Arabic texts, the English text shall prevail.