The Board of Directors of the Zakat, Tax, and Customs Authority, the additional cases in which real estate developers are eligible for a value-added tax refund, as set forth in Board Resolution No. 12-02-24 dated 1445/9/14.
In its latest issue published yesterday, Friday, the Umm al-Qura newspaper published the additional cases in which real estate developers are entitled to a VAT refund, which are as follows:
First
Eligible real estate developers who have deducted the value-added tax incurred on their purchases of goods or services related to real estate supplies eligible for a refund in their returns submitted to the Authority to claim a refund of that tax retroactively, effective as of October 4, 2020, or from the date they fulfill the provisions of (First), (Second), and (Third) of Ministerial Decision No. (1754) and dated 15/4/1442 AH, which sets forth “the regulations and conditions that must be met by a licensed real estate developer eligible for a refund of the value-added tax paid on its purchases related to exempt real estate supplies,” whichever occurs later, by including such paid tax in the refund requests to be submitted to the Authority, with the latest request being for the final period of the calendar year in which this decision takes effect, or the final period of the calendar year in which the VAT return was amended, whichever occurs later, subject to the following conditions:
a. The eligible real estate developer must be registered as a taxable person with the Authority during the period for which the tax refund is claimed.
B. The VAT returns must have been amended to include the tax corresponding to the invoices for which the developer will claim a refund as a person eligible for a refund for previous periods, provided that the developer submits the relevant invoices and supporting documents to the Authority.
C. The eligible real estate developer must have evidence that the tax for which a refund is claimed has been paid and relates to real estate supplies eligible for a refund.
Second
Eligible real estate developers whose properties have been placed under suspension by the competent authority are permitted to claim a retroactive refund of the value-added tax paid on the supply of goods or services related to real estate supplies eligible for a refund, effective as of October 4, 2020, or as of the date they fulfill the provisions of (First), (Second), and (Third) of Ministerial Decision No. (1754) dated April 15, 1442 AH, which sets forth “the regulations and conditions that must be met by a licensed real estate developer to be eligible for a refund of the value-added tax paid on its purchases related to exempt real estate supplies,” whichever occurs later, provided that the suspension has been lifted and real estate supplies eligible for refund have been made, to the extent related to such eligible real estate supplies, by including that tax in the refund requests to be submitted to the Authority, up to a maximum of the claim for the last period of the calendar year in which the suspension was lifted, subject to the following:
A. If the real estate developer had claimed a VAT refund as a person eligible for a refund before the properties were placed under suspension, and the suspension resulted in the developer making a real estate supply that is not eligible for a refund, the developer must repay the amount of tax previously refunded by the Authority as an eligible real estate developer, until the suspension is lifted and the developer makes real estate supplies eligible for a refund.
B. The eligible real estate developer must have amended their VAT returns to reflect the tax for which they will claim a refund as an eligible real estate developer, provided they were registered with the Authority as a taxable person during the suspension period.
Third
Eligible real estate developers who are registered with the Authority as taxable persons are permitted to claim a refund of the VAT due that has been declared, or that has been adjusted based on the Authority’s assessment, for imported services that must be declared in VAT returns under the reverse charge mechanism, or for goods imported into the Kingdom that must be declared in those returns in accordance with the provisions of Article (44) of the Regulation, and related to eligible real estate supplies, effective as of October 4, 2020, or as of the date they fulfill the provisions of (First), (Second), and (Third) of Ministerial Decision No. (1754) dated 15/04/1442 AH, which sets forth “the regulations and conditions that must be met by a licensed real estate developer to be eligible for a refund of the value-added tax paid on its purchases related to exempt real estate supplies”, whichever occurs later, by including them in the refund applications to be submitted to the Authority, with the deadline being the application for the last period of the calendar year in which this resolution took effect or the last period of the calendar year during which that tax was calculated in the tax return, whichever occurs later, subject to the following conditions:
A. The tax due must have been calculated as output tax on previous supplies in their tax returns filed with the Authority.
b. The person eligible for the refund must not have deducted the tax for which a refund is claimed as input tax in their VAT returns.
c. The output tax due must have been paid or settled with the Authority.
Payment of the tax or its settlement through returns filed with the Authority shall be considered proof of tax payment in accordance with the rules and procedures applicable to real estate developers eligible for a refund.
