Key Updates on Saudi Arabia's Real Estate Transaction Tax (RETT) Law

The Real Estate Transaction Tax (RETT) Law, introduced under Ministerial Resolution No. 84, will come into effect 180 days after its publication. This law aims to regulate real estate transactions, provide clear compliance guidelines, ensure transparency, and reduce tax evasion. The RETT Law applies to all real estate transactions occurring after October 4th, 2020. It introduces clear guidelines for undocumented transactions, ensuring accountability and transparency. Additionally, the law defines new obligations for real estate companies, emphasizing their tax responsibilities. Strict penalties are set for tax evasion and delays in compliance. Certain types of real estate transactions are exempt from RETT, with further details to be provided by the Zakat, Tax, and Customs Authority (ZATCA). ZATCA will also issue additional regulations to clarify the specifics of the law, ensuring stakeholders understand their obligations.

Tax Alert: 16th Phase of ZATCA E-Invoicing Integration Announced

The Zakat, Tax, and Customs Authority (ZATCA) has recently launched the sixteenth wave for the integration phase of the e-invoicing (Fatoora) system. This initiative is part of ZATCA's ongoing efforts to enhance transparency and compliance across Saudi Arabia's tax system, as the nation continues to progress in its digital transformation journey. The sixteenth wave of e-invoicing integration targets all VAT-registered taxpayers whose revenues exceeded SAR 3 million in the fiscal years 2022 or 2023. All commercial activities that meet this threshold, regardless of their size or sector, must comply by integrating their e-invoicing systems with the Fatoora platform. Businesses falling under the scope of this wave must ensure compliance by integrating with the Fatoora platform no later than April 1, 2025. It is crucial for affected taxpayers to begin their preparations as early as possible to avoid the risks and penalties associated with non-compliance. Fatoora is the national e-invoicing platform established by ZATCA as a key component of its broader digital transformation agenda. The platform is designed to facilitate the issuance, storage, and processing of electronic invoices and credit/debit notes in a secure and standardized manner. Integration with Fatoora allows ZATCA to closely monitor invoicing practices, ensuring compliance with tax regulations while minimizing the potential for fraud and discrepancies in financial reporting. The integration of e-invoicing through Fatoora offers several benefits for both businesses and the Saudi economy as a whole. E-invoicing ensures that all transactions are properly documented and reported, significantly reducing the risks of tax evasion. By automating the invoicing process, businesses can minimize errors and save valuable time in issuing and processing invoices. Integration with the Fatoora platform ensures businesses adhere to ZATCA’s requirements, thus avoiding potential penalties and fines for non-compliance. Businesses that fall under the sixteenth wave should take the following actions to ensure compliance: review VAT revenue for the years 2022 and 2023 to determine if they meet the SAR 3 million threshold; verify that their e-invoicing systems are capable of integrating with the Fatoora platform; contact accounting or software providers to assess the readiness of their invoicing solutions for compliance; and initiate the integration process well before the deadline to prevent any disruptions to business operations. Failure to comply with ZATCA’s e-invoicing requirements can result in a range of penalties, including fines, business disruptions, and potential audits. Businesses are advised to take proactive measures to ensure they meet the mandate within the specified timeline to avoid these consequences. For more detailed information on the e-invoicing integration requirements, you are encouraged to visit the official ZATCA website or consult with your tax advisor for specific guidance.

Saudi's RETT Law introduces tax obligations and penalties for real estate transactions post-October 2020, with ZATCA providing further guidance. ZATCA’s 16th e-invoicing wave targets VAT-registered entities exceeding SAR 3 million, with integration mandated by April 2025 to ensure compliance. Egypt mandates e-invoicing for all transactions, enhancing transparency and reducing tax evasion, while phasing out paper invoices by July 2023. Egypt also aligns accounting standards with IFRS, updating regulations to boost transparency, attract foreign investment, and meet international practices

Mark Crawford

Egypt's Mandatory E-Invoicing System: Key Updates for Businesses

Egypt continues its journey toward digital transformation, particularly with the introduction of its mandatory e-invoicing system overseen by the Egyptian Tax Authority (ETA). This initiative aims to streamline the country's tax system, enhance transparency, and combat tax evasion. Since November 2021, Egypt has been rolling out e-invoicing in phases, beginning with large companies and gradually expanding to smaller businesses. By April 2023, e-invoicing became mandatory for all B2B transactions, with plans to extend it to all B2C transactions as well. By July 2023, paper invoices were officially phased out, and all businesses, regardless of size, must now use e-invoices for VAT purposes. Non-compliance can lead to severe penalties, including the loss of VAT input tax credits and potential fines, aiming to boost tax transparency and reduce the shadow economy. Key features of Egypt's e-invoicing system include the requirement for electronic signatures on every invoice, the assignment of a unique invoice code (UUID), and the inclusion of data such as the supplier's and buyer's tax numbers, descriptions of goods or services, tax amounts, and the total due. Businesses must also integrate their ERP systems with the ETA platform to ensure real-time submission and validation of invoices. The e-invoicing system promises numerous benefits, such as faster invoice processing, reduced errors, lower administrative costs, and improved security through encrypted transactions. Moreover, it gives the government greater control over tax collection, helping tackle tax evasion and improve fiscal governance. For businesses to comply, they must register with the ETA's e-invoicing system, implement software capable of generating and submitting invoices in the required formats (JSON or XML), and integrate their systems with the ETA platform for real-time validation. For more information on Egypt's e-invoicing system, businesses can refer to sources such as KPMG Egypt and TMF Group for in-depth guidance.

Financial Reporting Standards Updates in Egypt – October 2023

Egypt's accounting and financial reporting standards have undergone significant updates to align with international best practices and enhance transparency. The Egyptian Accounting Standards (EAS) have been revised to align with major International Financial Reporting Standards (IFRS) updates, although Egypt has not fully adopted IFRS. In 2023, amendments were introduced to several standards, including financial instruments and real estate investments, with provisions now similar to IFRS 9 (Financial Instruments) and IFRS 16 (Leases). Key amendments include updates to EAS 17, which now includes equity accounting for investments in subsidiaries and associates, aligning closer with international standards. EAS 34, related to real estate investments, now allows businesses to choose between the fair value model and the cost model for valuation, similar to global standards. Additionally, new guidelines have been issued for accounting for carbon emission reduction certificates, reflecting Egypt’s growing focus on environmental accountability and aligning with global trends. These updates aim to enhance financial transparency, boost investor confidence, and are part of Egypt's broader strategy to attract foreign investment by improving corporate governance and the accuracy of financial reporting. The Financial Regulatory Authority (FRA) has played a key role in these changes, particularly for public companies and financial institutions. Overall, these updates ensure that Egyptian businesses remain competitive in the global market while meeting growing demands for transparency and environmental accountability.

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