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Tax Alert - October 2020

Tax Alert - October 2020

Real Estate Transaction Tax

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On 1 October 2020,  Royal Decree A84 was issued announcing the creation of a new Real Estate Transaction Tax with a rate of 5% of the real estate supply. The Royal Decree exempts all real estate transactions that take place after the issue of this new decree from Value Added Tax (VAT) including:

  • transfer of ownership;
  • the sale of commercial, residential, or agricultural real estate; and
  • the sale of  developed and undeveloped land.

Licensed real estate developers will be entitled to recover VAT incurred on purchases of goods and services.

The General Authority for Zakat and Tax will be responsible for managing and collecting the new tax and the Minister of Finance will decide which VAT regulations will apply to the new tax until specific policies and regulations are drafted.

This decision marks an effort to boost the real estate sector, which forms an integral part of the Kingdom’s Vision 2030. It also aims to support the Kingdom’s citizens and includes a commitment that the government will bear up to SAR1 million in tax for the purchase of the first home by Saudi Nationals.

Get in touch

Riyadh Office

  

Wadih Abu Nasr

Head of Tax, KSA and Levant

E: wabunasr@kpmg.com

Nick Soverall

Senior Director, Head of Indirect Tax, KSA

E: nsoverall@kpmg.com

Peter Bourke

Senior Director, M&A/ Int’l Tax

E: peterbourke@kpmg.com

Mohamed Araji

Senior Director, FS/ Tax Reimagined

E: maraji@kpmg.com

Ali Sainudheen

Director, Tax & Zakat Compliance

E: asainudheen@kpmg.com

Stefan El Khouri

Director, Transfer Pricing

E: selkhouri@kpmg.com

Pascal Cange

Senior Tax Advisor, Customs and International Trade

E: pcange@kpmg.com

Youssef Aoun

Director, Tax technology Lead

E: yaoun@kpmg.com

Jeddah Office

Mohamed ElSwefy

Senior Director, Family Office & Private Clients

E: melswefy@kpmg.com

Faisal Tanvir

Director, Tax & Zakat Compliance

E: FTanvir@kpmg.com

Salam Eido

Director, Indirect Tax

E: seido@kpmg.com

 

Khobar Office

Tareq Al Sunaid

Partner, Head of Domestic Tax

E: talsunaid@kpmg.com

Mohammad Kamran Sial

Senior Director, Tax & Zakat Compliance

E: ksial@kpmg.com

Anil Bahl

Director, Khobar

E: anilbahl@kpmg.com

 

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