ARTICLE · 10 FEBRUARY 2025

Tax Alert: ZATCA Issues Guidelines On RETT For BOOT Contracts

KPMG

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On 25 January 2025, Zakat, Tax and Customs Authority (ZATCA) issued guidelines to clarify the application of Real Estate Transaction Tax (RETT) in the case of build-own-operate-transfer (BOOT) contracts.

Saudi ArabiaTax

On 25 January 2025, Zakat, Tax and Customs Authority (ZATCA) issued guidelines to clarify the application of Real Estate Transaction Tax (RETT) in the case of build-own-operate-transfer (BOOT) contracts. A summary of the clarifications is provided below:

Certain categories of immovable assets

ZATCA has clarified that when immovable assets such as machinery, equipment and fittings where the concept of real estate may not apply, are part of a BOOT project and belong to the operator whose ownership will be transferred to the beneficiary at the end of the contract period, such immovable assets shall not be considered part of the Real Estate Asset for the purpose of application of RETT.

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