The Zakat, Tax and Customs Authority (ZATCA) has amended Real Estate Transaction Tax Implementing Regulations. The amendments included exemptions from RETT, most notbally the transfer of a real estate from any person to a real estate developer licensed to carry out off-plan sales or rent activities, provided that the real estate shall be intended for any off-plan sales along with many other exceptions. Such amendments shall be effective as of Friday, Muharram 21, 1444, corresponding to August 19, 2022.
The Authority stated that the other exemptions include: the transfer of a real estate by a natural person to a company in which he holds all shares, provided that no change had been made on his equity for at least 5 years, or the transfer of a real estate from a person to companies in which he holds all shares, provided that no change had been made in equity of the beneficiary company for at least 5 years.
The exemptions from RETT also include the transfer of a real estate free of charge to a company incorporated in KSA, the shares of which are held by family or charitable endowment provided that no change had been made in equity of the beneficiary company for at least 5 years.
In addition, a new exemption has been made, in which a real estate is returned to its previous owner as a result of the cancelation of the authenticated real estate transaction by mutual agreement within at least 90 days from authenticating data subject of the cancelation, provided that no changes had been made on the real estate description and its full value shall be returned.
ZATCA urges taxpayers who have any inquiries in relation to the new amendments to the Real Estate Transaction Tax Implementing Regulations to reach out via its 24/7 call center hotline (19993), the Customer Care Twitter account (@Zatca_Care), via e-mail (email@example.com), or by instant messages on (www.zatca.gov.sa).
RETT shall be imposed at a rate of 5% on real estate whose ownership has been transferred from a person or enterprise to another by sale, trade-off, assignment, donation or similar manners, with some exceptions based on the provisions of the Real Estate Transaction Tax Implementing Regulations. Any real estate ownership transfer process must be documented on the RETT platform at ZATCA's website first by showing the real estate's data and determining the exclusion on transaction before the real estate conveyance at the notary public or a legally accredited certification body.