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Saudi Arabia: Approved amendments to the RETT Implementing Regulations

22 February, 2022

In brief

The Board of Directors of Zakat, Tax and Customs Authority (‘ZATCA’) has approved the amendments/additions to various Articles to the Implementing Regulations of Real Estate Transaction Tax (“RETT”). 

These amendments will take effect as of 18 February 2022. 

The announcement is published on the official gazette and can be accessed here. The approved amendments are available only in Arabic language at the moment and can be accessed here.

In detail

Earlier during December 2021 last year, ZATCA published a draft of proposed amendments to certain Articles to the Implementing Regulations of RETT for public consultation on the National Competitiveness Centre platform.

The Board of Directors of ZATCA on 08/07/1443 AH (corresponding to 09 February 2022) approved, by adopting Ministerial decision No. 1429, all the proposed amendments issued earlier during December 2021 without any changes.

Summary of amendments:

 

Reference to the Article

Approved text

Article 1 - Definitions

  • Replaced GAZT by ZATCA;

  • Addition of definitions for “relatives up to the third degree” and for “first, second and third degree relatives”.

Article 3 (A) - Exclusions

  • Amendment to the provisions related to disposal of real estate with no consideration to an offspring civil endowment (waqf);

  • Amendment to the provisions related to the transfer of the property as an authenticated gift;

  • Addition of a new exclusion related to the transfer of the property under a notarised will;

  • Excluding joint venture from the exclusion list for in kind contributions of a real estate property.

Article 4 - Due date of tax

  • Addition to include the date of authentication requirement of having a public notary or licensed governmental bodies;

  • Sales on map due date is on or before the date of authentication with a notary or licensed governmental bodies;

  • Paragraph 4 related to right of the Minister to exclude any other cases related to tax due date has been deleted.

PwC news alert issued earlier on proposed changes can be accessed here.

"Through the amendments, ZATCA extends exclusion from RETT application in certain cases and also clarify the due date of RETT payment in cases e.g. sale of map etc."

Tax and Legal Services - PwC Middle East

The Takeaway

Taxable persons are recommended to review the approved amendments and ensure implementation readiness from the effective date (i.e. 18 February 2022​).

In addition, the changes should be carefully considered while disposing a real estate property and planning restructure or contemplating a transfer of real estate properties to ensure compliance with the amended provisions of the RETT Regulations.

 

Contact us

Mohammed Yaghmour

Middle East Tax & Legal Services Leader, PwC Middle East

Tel: +966 56 704 9675

Mohammed Al-Obaidi

Zakat and Tax Leader, PwC Middle East

Tel: +966 50 525 6796

Yaseen AbuAlkheer

Partner, Zakat and Tax, PwC Middle East

Tel: +966544250540

Mohammad Hussein Amawi

Partner, Zakat and Tax, PwC Middle East

Tel: +966 55 800 9697

Chadi Abou Chakra

Middle East Indirect Tax Network Leader, PwC Middle East

Tel: +966 11 211 0400 Ext: 1858

Guido Lubbers

Partner - Indirect tax and fiscal policy, PwC Middle East

Tel: +966 54 110 0432

Fehmi Mounla

Partner, Zakat and Tax, PwC Middle East

Tel: +966 2 610 4400

Mohamed Harby

Partner, Zakat and Tax, PwC Middle East

Tel: +966 56 907 2618

Fayez Aldebs

Partner, Zakat and Tax, PwC Middle East

Tel: +966 54 400 1037

Ebrahim Karolia

Partner, International Tax and M&A Services, PwC Saudi Arabia

Tel: +966 11 211 0400 ext. 1771

Suleman Mulla

Partner, International Tax, PwC Middle East

Tel: +966 54 122 8051

Wael Osman

Tax & Zakat Partner, PwC Middle East

Tel: +966 13 849 6311

Mugahid Hussein

Partner, Zakat and Tax, PwC Middle East

Tel: +966 54 425 6573

Husain Miyasaheb

Partner, Middle East Transfer Pricing, PwC Middle East

Tel: +966 56 143 0843

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