Kingdom of Saudi Arabia: Tax developments in response to COVID-19
This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).
The content will be updated regularly. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.
Date accurate as of: 28 October 2020
Measures announced to provide relief for taxpayers include easing tax return filing and tax payment requirements for a limited time in response to the coronavirus (COVID-19) pandemic.
- The Minister of Finance announced, through a Ministerial Decision, that the amnesty for tax filing and payment will be extended until 31 December 2020. This is an extension of the waiver of penalties for Zakat, Income Tax, Withholding Tax, VAT, and Excise Tax, which ran from 18 March 2020 until 30 June 2020, and which had been previously extended until 30 September 2020, as follows:
- Tax/Zakat: Return filing dates will be postponed until 30 September 2020 for taxpayers with a December year-end, certificates will be issued without restrictions for the year 2019
- VAT: Return filing dates for VAT will be postponed until 30 June, 31 July, 31 August, 30 September for the February, March, April, May and June periods.
- Excise tax: Payments due on goods imported during the postponement period can be delayed, but the importer must submit monthly temporary returns to GAZT.
- Payments suspended: Penalties will not apply for payments of tax that are suspended.
- Refund payments: Refunds due to taxpayers are to be expedited.
New taxation measures
On May 10, 2020, the Minister of Finance, His Excellency Mohammed Al Jadaan, announced that the standard rate of VAT would be increased from 5% to 15% with effect from 1 July 2020. This increase is a response to the unprecedented economic fallout from the impact of the COVID-19 pandemic.
On 1 October 2020, Royal Decree A84 was issued announcing the creation of a new Real Estate Transaction Tax (RETT) with a rate of 5% calculated on the value of the real estate transaction. All real estate transactions that take place after 4 October 2020 will be exempted from Value Added Tax (VAT) and subject to the new RETT.