Article 21 establishes the principle of tax loss carryforward in Saudi Arabia. It permits a taxpayer to carry forward a net operating loss to the subsequent taxable year, deducting it from the tax base of following years until the loss is fully offset. The Implementing Regulations are tasked with defining the maximum annual deduction limits. The Article defines a net operating loss as the excess of allowable deductions over taxable income. For natural persons, this calculation is restricted to their specific business activity. A key amendment prohibits offsetting losses between oil/hydrocarbons production and natural gas investment activities.