Glossary

Tax & Zakat

25 terms in this category

Commercial VAT

15% tax on commercial real estate rental in Saudi Arabia, paid by commercial tenant to VAT-registered landlord.

Foreign Investment

Foreign property ownership in Saudi Arabia, subject to special conditions, opportunities grew after Vision 2030 reforms and ownership facilitation.

Input VAT

VAT paid on purchases for commercial activities, recoverable or deductible from output VAT.

Non-Resident Investor

Foreign investor owning property in Saudi Arabia, subject to different tax rules, may pay withholding tax on returns.

Output VAT

VAT collected from customers on sales, paid to tax authorities, with input VAT deducted from it.

Real Estate Disposal Tax

5% tax on real estate sales in Saudi Arabia, replacing VAT on real estate sale, paid by seller.

Residential Property Zakat

Properties for personal residence exempt from zakat, zakat imposed only on properties intended for trade or sale.

Residential VAT Exemption

Residential rental exempt from VAT in Saudi Arabia, reducing housing cost for citizens and residents.

Tax Audit

Tax authorities examining entity records to verify declarations, may reveal violations leading to fines and settlements.

Tax Compliance

Complying with tax laws and submitting declarations on time, requiring good accounting system, protecting from fines.

Tax Deduction

Deducting some expenses from revenues before tax calculation, reducing tax burden, includes maintenance and management in real estate.

Tax Evasion

Concealing or falsifying information to avoid paying due taxes, legally punishable crime, incurring fines and penalties.

Tax Exemption

Exempting some activities or categories from tax, residential rentals exempt from VAT, investment incentive.

Tax Incentive

Reductions or exemptions to encourage real estate investment, Saudi Arabia offers incentives for foreign investors in real estate sector.

Tax Invoice Requirements

Mandatory items in invoice like tax number, QR code, seller and buyer details, non-compliance leads to fines.

Tax Penalty

Financial penalties for tax violations like late declaration or non-registration, ranging from percentage of amount to multiples.

Tax Planning

Legal strategy to reduce tax burden through using exemptions and deductions, improving returns on real estate investments.

Tax Residency

Person or entity status regarding tax liability, defining tax obligations, most important in foreign real estate investment.

Tax Return

Document submitted to tax authority showing revenues, expenses, and due tax, submitted periodically, mandatory for registered entities.

Transfer Pricing

Pricing transactions between related companies, subject to rules to prevent profit shifting, important in multi-branch real estate companies.

VAT on Services

15% tax on brokerage and real estate management services, paid by client to registered office, deducted from commission.

VAT Registration

Entity registration for VAT when annual revenues exceed 375,000 SAR, mandatory for large real estate offices.

Withholding Tax

Tax deducted from payments to non-Saudi residents, includes real estate investment returns for foreigners, varying rates.

Zakat Base

Total funds subject to zakat after deducting obligations, includes commercial real estate and properties for sale, excludes fixed assets.

Zakat Rate

Imposed zakat percentage, 2.5% for individuals, varies for entities by fiscal period, paid annually.

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