The Minister of Finance and Chairman of the Board of Directors of the Zakat, Tax and Customs Authority, HE Mr. Mohammed Al-Jadaan, has approved amending the executive regulations of the real estate transaction tax, with the decision to be effective from the date of its publication in the Official Gazette.

The decision was published in the Umm Al-Qura Gazette. The official Umm Al-Qura Gazette published in its latest issue last Friday, the decision of the Minister of Finance No. (1445-88-1) dated 02/09/1445H

According to Umm Al-Qura, the decision will take effect on the date of its publication. According to Umm Al-Qura, the Minister of Finance, Chairman of the Board of Directors of the Zakat, Tax and Customs Authority, based on Clause (VI) of Royal Decree No. (A/84) dated 14/2/1442 AH, and after reviewing the Executive Regulations of the Real Estate Transaction Tax, issued by Ministerial Decision No. (712) dated 15/2/1442 AH, and its amendments, decided the following:

According to Umm Al-Qura, the Minister of Finance, Chairman of the Board of Directors of the Zakat, Tax and Customs Authority. <First: Approving the amendment of the Executive Regulations of the Real Estate Transactions Tax, in the attached format. <Second: This decision shall be communicated to those necessary for its implementation, published in the Official Gazette, and effective from the date of its publication. May God grant success.

List of amendments to the executive regulations of the real estate transactions tax

The details of amending the regulation are as follows:

1- Subparagraph (14) of paragraph (a) of Article (III)
Text before amendment: Disposal of real estate by a partner in a company by transferring the property in the name of the company, provided that the property was included in the company's assets before the effective date of the regulation, and that the disposer submits audited financial statements - or certified certificates - from a licensed chartered accountant proving the inclusion of the property in the company's assets before the effective date of the regulation until the date of disposal.

The text after the amendment. <Text after amendment: The disposal of real estate by any person to a company; provided that the real estate was included in the company's assets before the effective date of the regulation, and that person is a partner in that company on the date the real estate was included in its assets, and that the disposer submits audited financial statements - or certified certificates - from a licensed certified public accountant proving the inclusion of the real estate in the company's assets before the effective date of the regulation until the date of the disposal.

2. Subparagraph (15) of paragraph (a) of Article (III)
2- Subparagraph (15) of paragraph (a) of Article (III)
Text before amendment: The disposal of real estate by providing it as an in-kind contribution - by any person - to the capital of a real estate investment fund, when the fund is initially established in accordance with the rules and regulations of the Capital Market Authority, and the exception does not include funds established with the aim of leasing real estate.

The exception does not include funds that are established with the aim of leasing real estate. <Text after amendment: A real estate disposal that provides in-kind participation in the capital of a real estate investment fund established in accordance with the laws and regulations of the Capital Market Authority, provided that the units of the fund or the shares corresponding to the real estate disposal are not disposed of until the date of termination or liquidation of the fund, or for five years from the date of registration or ownership of the units or shares, whichever is earlier”.

3.

3- New addition in the deficit of paragraph (a) of Article (III)
Text after amendment: The change in the ownership ratio through the public offering of the shares of the disposed company or the units of the disposed fund in accordance with the rules and regulations of the Capital Market Authority shall not be considered a violation of the condition of not disposing of the shares or shares corresponding to the exempted real estate disposal.

4- Article Four
Text before amendment: The tax is due on the date of disposal on the basis of the value agreed upon between the parties or parties or the value of the property, provided that it is not less than the fair market value on the date of disposal - provided that the value of the property for the purposes of calculating the tax does not include the implicit profit margin in cases of financing from legally licensed entities - and is imposed on the real estate transaction, including completed, under construction or off-plan properties, and the tax due thereon must be paid as follows:...

<Text after amendment: The tax is due on the date of disposal on the basis of the value agreed between the parties or parties or the value of the property, provided that it is not less than the fair market value on the date of disposal - provided that the value of the property for the purposes of calculating the tax does not include the implicit profit margin in cases of financing from legally licensed entities - and is imposed on real estate disposal including completed, under construction or on the map, and the date of disposal in relation to the project (construction, ownership, operation and transfer) is the date of transfer of ownership or actual possession to the donee, and the tax due, in accordance with the following:...

The tax payable, as follows:...

5- Paragraph (b) of Article (IV)
Text before amendment: The tax shall be paid in cases that are not covered by the official documentation procedure at the competent administrative authority or the authorized notary - the disposal documented by unofficial documents - within (30) calendar days from the date of the contract or the final agreement of the disposal event, and the penalty for late payment shall be imposed for exceeding this period, and the date of the disposal may be proven by all means and evidence indicating it.

<Text after amendment: The tax shall be paid in cases that are not covered by the official documentation procedure at the competent administrative authority or the authorized notary - the disposition evidenced by unofficial documents - within (30) calendar days from the date of the contract or final agreement, or the transfer of ownership or the actual transfer of possession in the project (construction, ownership, operation and conversion), and the penalty for late payment shall be imposed for exceeding this period, and the date of the disposition may be proven by all means and evidence indicating it.

After the amendment.