The GAZT released the English version of the Circular (Number 2007003) outlining the appropriate VAT treatment for various circumstances where the Real Estate property is transferred as part of the business. Specifically, the Circular outlines the following situations and also provides examples to clarify the VAT treatment under of each of these scenarios:
- Transfer of commercial real estate properties which are occupied and operated by the transferor (before sale);
- Transfer of commercial real estate along with the existing lease contracts;
- Transfer of vacant or partly vacant real estate;
- Sale and lease back arrangements;
- Transfer of residential properties; and
- Transfer of mixed-use buildings or complexes.
It is important to note that the GAZT will consider the commercial reality of the underlying arrangement in determining whether an Economic Activity is transferred in respect of real estate transactions.
Source: gov.sa
Contribution by Satish Sarda
Latest Posts in "Saudi Arabia"
- Saudi Arabia 2025: Stricter Excise Tax Rules, Digital Tracking, and Tougher Penalties Announced
- Saudi VAT Grouping Overhauled: Stricter Criteria, New Exclusions, and Compliance Demands for 2025
- ZATCA Calls on Taxpayers to Benefit from Fines Cancellation and Penalties Exemption Before Deadline
- Saudi VAT 2025: Digital Marketplaces Face New Deemed Supplier Liabilities and Compliance Challenges
- Saudi Arabia Simplifies Proof of Origin Rules for GCC Imports, Removes Guarantee Requirement
