The Real Estate Transaction Tax (RETT) is a critical compliance requirement in Saudi Arabia, levied at a standard rate of 5% on qualifying real estate disposals. This guide provides corporate taxpayers with detailed insights into RETT filing deadlines, payment procedures, and best practices for avoiding penalties.
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Understanding RETT
The Real Estate Transaction Tax applies to the transfer of ownership or usufruct rights over real estate properties in Saudi Arabia, including sales, gifts, and certain barter arrangements. RETT is collected by the Zakat, Tax and Customs Authority (ZATCA) and applies regardless of whether the transaction is between related parties or independent buyers and sellers.
RETT Filing Deadlines
ZATCA mandates that RETT be declared and paid within a strict timeframe to ensure legal compliance. The general deadlines are:
- Immediate Filing Obligation: RETT must be declared before completion of the property transfer.
- Submission Timeline: The RETT return must be filed electronically via the ZATCA portal within a maximum of 30 days from the transaction date.
- Ownership Registration: The property will not be registered in the buyer’s name until RETT has been fully paid.
Missing the deadline may result in financial penalties and delays in completing the property transaction.
How to File RETT Through ZATCA’s Portal
- Login: Access your corporate taxpayer account on the ZATCA e-Services portal.
- Select RETT Services: Navigate to the RETT filing section and choose “Submit RETT Declaration.”
- Enter Transaction Details: Provide details of the property, seller, buyer, and transaction value.
- System Tax Calculation: ZATCA will automatically compute the 5% RETT based on the declared value.
- Review & Submit: Check the accuracy of the details before submitting to avoid penalties.
RETT Payment Procedures
Once the RETT return is submitted, ZATCA issues a payment reference number. The payment can be made using:
- SADAD Payment System: Use the biller code for ZATCA and enter the reference number.
- Bank Transfer: Pay directly to ZATCA’s designated bank account using the reference number.
- Immediate Payment Option: For faster property registration, pay RETT immediately upon filing.
Penalties for Late Filing or Payment
- Late Filing Penalty: A fine up to SAR 10,000 for failing to submit the RETT return on time.
- Late Payment Penalty: Interest charges and administrative fines on the unpaid amount.
- Property Registration Hold: The title will not be transferred until RETT is paid in full.
Best Practices for Corporate Taxpayers
- Prepare RETT documentation before the transaction date to meet deadlines.
- Coordinate with legal and finance teams for accurate property valuation.
- Keep a compliance calendar for all tax filing obligations.
- Consult with a Saudi tax advisor to navigate complex property transactions.
Conclusion
RETT compliance in Saudi Arabia is non-negotiable for corporate taxpayers engaging in property transactions. By understanding the filing deadlines, payment methods, and compliance requirements, businesses can ensure smooth property transfers and avoid costly penalties.
