Saudi Arabia Replaces VAT on Real Estate Transactions with a New 5% Tax

On 1 October 2020, the Saudi Press Agency has issued a release announcing the issuance of a Royal Order that provides for the following:

• An exemption of real estate supplies from VAT;
• The refund of input VAT paid by licensed real estate developers
• The introduction of a new tax, the Real Estate Transaction Tax, that is imposed on real estate supplies at a rate of (5%) of the value of the real estate supply; and
• Confirmation that real estate supplies that are exempt from VAT are subject to Re…