Translation of the attached article:
Some taxpayers subject to real estate transaction tax may face cases where they believe the tax was imposed incorrectly, or that its value was not calculated according to the applicable laws and regulations, or that penalties were imposed on the transaction despite the existence of legal grounds for objection.
Therefore, the law allows the right to object to the tax in such cases. In this article, we will explain how to submit an objection to real estate transaction tax, the reasons on which the objection may be based, and the documents that must be submitted to support the objection.
What Do We Mean by Objecting to Real Estate Transaction Tax?
Objecting to real estate transaction tax is a legal procedure that allows the taxpayer obligated to pay the tax to request a review of the decision imposing the tax or the way it was calculated, if there is an error in applying the laws, estimating the tax value, or classifying the real estate transaction.
Its purpose is to enable the competent authority to re-examine the case and the submitted documents and verify the validity of the issued decision. The request and its supporting documents are then reviewed, and a decision is issued either accepting the objection, rejecting it, or accepting it partially.
Before submitting an objection or discussing the imposed tax amount, it is important first to learn about real estate transaction tax, so that you understand when it is imposed, how it is calculated, and which cases may qualify for exemption or review.
When Do You Have the Right to Submit an Objection to Real Estate Transaction Tax?
You may find yourself needing to object to real estate transaction tax in certain cases, such as:
- An error by the Authority in calculating the tax.
- Imposition of an undeserved late payment penalty.
- A discrepancy between the submitted tax return and the invoices.
- Imposition of tax on exempt transactions.
Most Common Reasons for Objection
The reasons for objecting to real estate transaction tax may differ from one case to another. The most common reasons for objection include:
- Calculating the tax on a transaction that is legally exempt.
- An error in the property value or the data used to calculate the tax.
- Incorrect classification of the type of real estate transaction.
- Failure to apply one of the legal exemptions despite its conditions being met.
- Imposition of a penalty due to an error in procedures or data.
- The existence of documents or facts that were not taken into account when issuing the decision.
- An administrative or technical error occurring while submitting or processing the request.
Before submitting an objection to real estate transaction tax, first review the conditions for exemption from real estate transaction tax to ensure that the exemption applies to your case.
Required Documents to Support the Objection
There are several documents you can submit to support an objection to real estate transaction tax, including:
- A copy of the Authority’s notice showing the amount claimed.
- Relevant contracts or tax invoices.
- A copy of the submitted tax return.
- Explanations or accounting memoranda from your financial advisor.
Steps to Object to Real Estate Transaction Tax
There are several steps you need to follow in order to submit an objection to real estate transaction tax. They are as follows:
- Access the website of the Zakat, Tax and Customs Authority.
- Choose e-services from the website.
- Select the tax services option from the services displayed.
- Choose real estate transaction tax from the tax services. You can also type “objection” in the search box so that the available objection services appear, and then choose the one that suits your property case.
- Fill in the required data, submit the objection request, and wait until it is decided.
When objecting to real estate transaction tax related to a mortgaged property, it is important to learn about the new real estate mortgage law to understand the relationship between the mortgage and tax obligations.
What Happens After Submitting the Objection?
After the objection is submitted, the competent authority reviews the request and verifies the submitted documents and data. It may request additional information or supporting documents if needed. After the review is completed, a decision is issued either accepting the objection in full, accepting it partially with an amendment to the tax or penalty amount, or rejecting it if the original decision is found to be valid.
You can follow up on the status of your request after submitting the objection through the electronic portal, by contacting the Authority’s customer service in case of delay, or by receiving notifications through text messages or email.
The Difference Between Objecting to the Tax and Objecting to the Penalty
An objection to the tax is submitted when the taxpayer believes that the original tax, the way it was calculated, or the transaction’s subjection to the tax is incorrect, and requests reconsideration of the tax decision itself.
An objection to the penalty, however, is usually connected to a financial sanction imposed due to a legal violation, such as late payment, submitting incorrect data, or violating legal obligations. In this case, the objection concerns the validity of imposing the penalty, its amount, or the existence of grounds for reducing or cancelling it.
If your objection is related to the imposed tax amount, it is useful to review the real estate tax calculator to compare the amount due with the amount that was calculated.
Mistakes That Lead to Rejection of the Objection
There are mistakes that may lead to rejection of an objection to real estate transaction tax. You should avoid them to prevent your objection from being rejected. These include:
- Not delaying the submission of the objection beyond the specified legal period, which is 30 days.
- Not submitting the objection without supporting documents.
- Not confusing income tax or zakat with value added tax.
- Not relying on general wording; specific and clear reasons must be provided.
When there is an error in tax calculation or an undeserved penalty is imposed, a tax lawyer can help you review the decision and determine the best way to object.
What Is the Role of the Lawyer in Objecting to Real Estate Transaction Tax?
The procedures for objecting to real estate transaction tax may seem simple, but in many cases, acceptance of the objection depends on how the legal reasons are presented and how the supporting documents are submitted correctly.
Therefore, Nawaf bin Awad Al-Harbi Law Firm helps individuals and companies in various disputes related to real estate transaction tax in a way that protects their rights and reduces legal risks as follows:
- Preparing and drafting the objection to real estate transaction tax according to the approved legal foundations.
- Reviewing the submitted documents and proving entitlement to exemptions when their conditions are met.
- Providing legal consultations in real estate tax disputes.
- Representing clients before the competent authorities and committees when needed.
- Following up on objection procedures until the decision is issued and providing advice regarding the next steps.
Contact now with the best tax and real estate cases lawyer to ensure that your objection to real estate transaction tax is submitted legally and correctly, with document review, drafting the objection according to Saudi regulations, and following up on all official procedures to avoid mistakes or rejection of the request.
Conclusion
You can object to real estate transaction tax if you find that there is an error in calculating the tax or that it was imposed on transactions exempt from tax. This objection must be supported by documents to ensure acceptance of the request and avoid rejection. This requires the presence of a lawyer who is aware of all details, so do not hesitate to contact a specialized lawyer in this matter.
Frequently Asked Questions
Does Any Person Have the Right to Object to Real Estate Transaction Tax?
The taxpayer or their representative has the right to submit an objection if they believe that the decision to impose the tax, calculate it, or impose the penalty involved an error or violated the applicable laws.
Does Submitting the Objection Automatically Cancel the Tax?
Merely submitting the objection does not mean that the request will be accepted or that the tax will be cancelled. The competent authority reviews the request and issues its decision after studying the documents and facts.
Is It Recommended to Seek the Assistance of a Lawyer When Submitting the Objection?
If the dispute involves large financial amounts or requires presenting legal arguments, seeking the assistance of a specialized lawyer will be necessary. In this case, the lawyer helps prepare the objection lawfully and increase the chances of its acceptance.
