Saudi Arabia: Approved Amendments to the RETT Implementing Regulations

Article reference

What has been changed?

Amendment to sub-paragraph (14) of Article 3 (A)

The exemption from RETT application on disposal of real estate to a company has now been extended to ‘any person’ provided that:

• The real estate was recorded in the company’s assets before the effective date of these Regulations; and
• that person is a shareholder in that company on the date the real estate is recorded in the company's assets. 

This expansion marks a departure from the current restriction, which limits eligibility to shareholders and co-owners.

The certification required vis-a-vis inclusion of real estate in the company’s assets before the effective date of RETT Regulations is now proposed to be obtained from a licensed Public Accountant previously it was required from a licensed Chartered Accountant.

Amendment to sub-paragraph (15) of Article 3 (A)

The exemption from RETT application on disposal of the real estate as an ‘in-kind contribution’ in the capital of a real estate investment fund (upon the established in accordance with the laws and regulations of the Capital Markets Authority) has now been extended to include all types of funds including those funds which are established for renting purposes.

The above exception will be conditional on the following, whichever comes earlier:

• non disposal of the fund’s units or shares related to real estate disposed of until the date of termination or liquidation of the fund; or 
• for a period of five years from the date of registration or ownership of the units or shares.

Addition of paragraph (C) to Article 3

• Alterations in the ownership percentage resulting from the listing or re-listing of shares of the Company or a Fund, in compliance with the rules and regulations set forth by the Capital Market Authority, shall not be construed as a breach of the condition prohibiting the disposal of shares or units associated with the exempted real estate disposal.

Amendment to Article 4

• the date of actual transfer of ownership; or
• On the date of transfer of possession to whom the real estate is disposed

Amendment to paragraph (B) of Article 4

The tax due point in cases not covered by the official authentication procedure with the competent administrative authority or the approved notary has been clarified to be:

• within 30 calendar days from the date of the contract or final agreement, transfer of ownership or transfer of actual possession in a build, own, operate and transfer projects.

A penalty for late payment of tax will be imposed in case where the payment exceeded the above period.