Saudi Arabia: Draft Rules and Procedures for VAT recovery by Licensed Real Estate Developers
19 May, 2022
In brief
The Zakat, Tax and Customs Authority (‘ZATCA’) have issued draft rules and procedures relating to VAT recovery by qualified/ licensed real estate developers on goods and services purchased in KSA by them in relation to their exempt supplies of real estate.
The Rules and Procedures (available only in Arabic) were published on the Public Consultation Platform of the National Competitiveness Center on 11 May 2022 - for public consultation. Interested stakeholders and taxpayers are encouraged to express their opinions - on this platform - and share feedback on the draft amendments no later than 25 May 2022.
In detail
Based on the provisions of Articles 14 and 70 of the VAT Implementing Regulations, a draft of Rules and Procedures has been issued by ZATCA for allowing qualified / licensed real estate developers to recover VAT paid on goods and services received by them in KSA relating to onwards exempt supplies of real estate.
The draft Rules and Procedures contain 20 rules and mainly cover:
Process of submission of qualified real estate developer application;
Exceptions related to allowing real estate developers to refund input VAT incurred prior to obtaining eligible person status;
VAT refund treatment related to real estate properties owned by Ministry of Housing for sales on maps projects;
Refund filing frequency;
Instances of rejection of VAT refund application. …etc
The Takeaway
The public consultation forum presents a unique opportunity for interested stakeholders to share views and highlight any improvement areas regarding the draft Rules and Procedures.
Interested stakeholders are encouraged to share their feedback no later than 25 May 2022 through the prescribed channel.
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Chadi Abou Chakra
Middle East Indirect Tax Network Leader, PwC Middle East
Tel: +966 11 211 0400 Ext: 1858
Guido Lubbers
ITX Partner | TLS Middle East Consumer Markets leader, PwC Middle East
Tel: +966 54 110 0432
Ebrahim Karolia
Partner, International Tax and M&A Services, PwC Saudi Arabia
Tel: +966 11 211 0400 ext. 1771
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