On Thursday, Saudi King Salman bin Abdulaziz Al Saud issued a new royal order regarding real estate supplies.
According to the official “SPA” website, the king issued an order to exempt real estate supplies made after the provisions in this order come into effect from value-added tax.
The royal order confirmed the refund of what is paid after the implementation of the provisions contained in this order in terms of the value of the value-added tax on the inputs for licensed real estate developers in accordance with the controls of recovery and the relevant rules approved by the Minister of Finance, Chairman of the Board of Directors of the General Authority for Zakat and Income in coordination with the Minister of Housing, and the Minister of Finance shall approve the Chairman. The Board of Directors of the General Authority for Zakat and Income is a list (updated periodically) with the names of the developers.
Under the royal decree, a tax in the name of “real estate disposal tax” will be imposed on real estate supplies that take place after the provisions in this order come into effect, at a rate of 5% of the value of the real estate supply, which will be collected upon documenting real estate disposal.
The royal statement also stated that for the purposes of implementing what was stated in the first and third clauses of the order, the Minister of Finance, the Chairman of the Board of Directors of the General Authority for Zakat and Income, determines real estate supplies that are exempt from value added tax and are subject to real estate tax.
The state bears tax on real estate transactions for no more than an amount of 1 million riyals from the purchase price of the first home for a citizen, and the Minister of Finance and Chairman of the Board of Directors of the General Authority for Zakat and Income approves the necessary controls and procedures for this.
The General Authority for Zakat and Income is responsible for administering and collecting the real estate disposal tax. The Minister of Finance, Chairman of the Board of Directors of the General Authority for Zakat and Income, issues the necessary decisions, including determining the provisions that apply to this tax contained in the VAT system, to the extent consistent with the nature of this tax. Tax.
The Committee for Settlement of Tax Violations and Disputes, and the Special Committee for Tax Violations and Disputes, whose formation and terms of reference are stipulated in Royal Decree No. M / 113, are responsible for adjudicating violations and disputes arising from the application of the provisions referred to in Clause Six of the order.
The Minister of Finance and the Chairman of the Board of Directors of the General Authority for Zakat and Income shall determine the date of its implementation, provided that it is following its publication, and not exceeding fifteen days from the date of its issuance.
The royal decree indicated that the General Authority for Zakat and Income would prepare a draft system for taxing real estate disposal in light of what was included in the previous clauses, and raise it within a period not exceeding 90 days to complete the necessary legal procedures in this regard.
Source: SPA
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