Tax & Zakat
25 terms in this category
Commercial VAT
Commercial VAT is the 15% value added tax charged on leases of non-residential property, such as shops, offices, warehouses, land and showrooms, and on hotel stays and serviced apartments, whenever the landlord is registered, or required to register, for VAT; the landlord charges it to the tenant and pays it to ZATCA.
Foreign Investment
Foreign investment in Saudi real estate is the ownership of property in the Kingdom, or the acquisition of rights in rem over it such as usufruct, by non-Saudis, whether individuals, companies or funds, directly or through licensed companies and funds, under the Law of Real Estate Ownership by Non-Saudis and the Investment Law.
Input VAT
Input VAT is the value added tax a registered person incurs on goods and services it buys or imports for use in its economic activity, which it may deduct from the output VAT it collects, provided the purchases relate to taxable supplies at the standard or zero rate.
Non-Resident Investor
A non-resident investor is an individual or entity that is not resident in Saudi Arabia for tax purposes but earns income from a Saudi source, such as property rent, dividends or sale gains, or owns real estate there.
Output VAT
Output VAT is the value added tax a registered person charges on its taxable supplies of goods and services and collects from customers, then reports in its periodic return and pays to ZATCA after deducting allowable input VAT.
Real Estate Transaction Tax (RETT)
A 5% tax on the value of any real estate disposal, payable before title transfer, governed by a new law with a 15-article executive regulation effective 10 April 2025.
Residential Property Zakat
Residential property zakat refers to the zakat ruling on property a person owns for their own residence or personal use, and the rule is that no zakat is due on it, however high its value, because zakat applies to growing wealth or wealth held for trade, and a home is a basic need.
Residential VAT Exemption
The residential VAT exemption is the rule that makes the lease or licence of residential real estate in Saudi Arabia an exempt supply for Value Added Tax, so a landlord does not add 15% VAT to residential rent, unlike commercial rent, which is taxed at the standard rate.
Tax Audit
A tax audit (tax examination) is ZATCA's review of a taxpayer's returns, books, invoices and records to verify what was declared; it may end by confirming the return or by issuing an amended assessment with additional tax and penalties.
Tax Compliance
Tax compliance is a taxpayer's fulfilment of all tax and zakat obligations on time: registering when the statutory threshold is reached, issuing correct invoices, filing returns, paying tax, keeping records and cooperating with examinations.
Tax Deduction
A tax deduction is the subtraction of an expense or amount permitted by law from taxable income, or from the tax due, before arriving at the final liability, reducing the taxpayer's burden.
Tax Evasion
Tax evasion is any deliberate act aimed at not paying tax that is due, reducing it or obtaining a refund that is not due, such as submitting forged, fabricated or false documents, returns or records, or concealing a taxable activity.
Tax Exemption
A tax exemption is a statutory exception that removes a supply, income, transaction or category of taxpayer from a tax that would otherwise apply, so that no tax is charged on it; it exists only where the law or its regulations expressly provide for it.
Tax Incentive
A tax incentive is a tax advantage granted by the state under a legal provision, such as a reduced rate, a temporary exemption, the state bearing tax on the taxpayer's behalf or an easier refund route, to encourage a particular activity, investment or group.
Tax Invoice Requirements
Tax invoice requirements are the data fields and formal and technical conditions that an invoice issued by a VAT registrant must satisfy to be legally valid, both to evidence the supplier's output VAT and to allow the customer to deduct input VAT.
Tax Penalty
A tax penalty is a financial sanction ZATCA imposes on a taxpayer for breaching tax laws, such as failing to register, filing or paying late, filing an incorrect return or evading tax; it is added to the original tax and does not replace it.
Tax Planning
Tax planning is arranging transactions and investments in advance, in lawful ways that use the exemptions and options the law provides, to reduce or defer the tax and zakat burden, with full disclosure of the facts and real economic substance.
Tax Residency
Tax residency is the legal status that determines whether an individual or an entity is treated as a 'resident' of a country for tax purposes, and therefore which tax applies, what income falls within scope and how it is collected.
Tax Return
A tax return is the form a taxpayer files electronically with ZATCA for a specified period, disclosing its sales or revenue, purchases and the tax or zakat due; filing it is the taxpayer's self-assessment of what it owes.
Transfer Pricing
Transfer pricing is the setting of prices for transactions between related parties, such as a parent company and its subsidiaries or companies under common control, so that they match what independent parties would agree in comparable circumstances, known as the arm's length principle.
VAT on Services
VAT on real estate services is the standard 15% VAT charged by a registered supplier on property-related services, such as sale and letting brokerage commissions, property-management and rent-collection fees, valuation, surveying, design and maintenance.
VAT Registration
VAT registration is the enrolment of a person carrying on an economic activity, whether an individual or an entity, with the Zakat, Tax and Customs Authority (ZATCA) to obtain a tax identification number.
Withholding Tax
Withholding tax (WHT) is a tax that a resident payer in Saudi Arabia, or the permanent establishment of a non-resident, deducts from amounts paid from a Saudi source to a non-resident that has no permanent establishment in the Kingdom, and then remits to the Zakat, Tax and Customs Authority (ZATCA) on the recipient's behalf.
Zakat Base
The zakat base is the amount on which a payer's zakat is calculated.
Zakat Rate
The zakat rate is the percentage applied to the zakat base to determine the zakat due.
Other Categories
Contracts & Leasing
40 terms
Financial & Accounting
49 terms
Saudi Regulations
32 terms
Legal & Regulatory
39 terms
Property Types
40 terms
Valuation & Investment
36 terms
Property Management
39 terms
Construction & Development
40 terms
Real Estate Technology
25 terms
Real Estate Marketing
30 terms
Ownership & Rights
37 terms
Disputes & Resolution
28 terms
Real Estate Financing
34 terms
Auctions & Sales
20 terms
