VAT refund filings for real estate supplies to individuals now open

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The General Secretariat of the Zakat, Tax and Customs Committees (GSTC) has launched claim registration for VAT refunds on real estate supplies made to individuals between Jan. 1, 2018, and Oct. 4, 2020.

In a statement today, Oct. 14, GSTC said the procedure is based on Royal Order No. 54152, aligning with the mechanisms and procedures approved by the Zakat, Tax and Customs Authority’s (ZATCA) board.

The guidelines cover cases where VAT is not deemed due on real estate supplies involving sales and transfer of ownership. Therefore, individuals who paid VAT and related penalties to ZATCA are now allowed to file a refund claim with the GSTC, subject to specific regulatory conditions.

To qualify for a VAT refund, the real estate supply must have been made by an individual, defined as a natural person, who paid VAT on the transaction to ZATCA. They should have proof of not engaging in any real estate activity involving the regular and continuous sale of properties for income generation.

Refund eligibility excludes individuals who carried out more than one real estate supply within 12 consecutive months where the total value exceeded the mandatory registration threshold under the GCC Unified VAT Agreement.

Another requirement is that the individual who made the real estate supply must not have deducted input VAT related to the real estate asset.

Eligible individuals who have settled the VAT with the authority can submit their refund claims—covering both the tax and associated penalties—via the Secretariat's digital litigation portal HAYAD, within 30 days from the date the mechanisms and procedures were published in the Official Gazette on Oct. 13.

The GSTC urged individuals to visit its website and review the mechanisms, procedures, and instructional manual on VAT refunds to learn more about eligibility requirements and how to file a claim.