Article 16 of the Saudi Real Estate Transaction Tax Law
المادة 16 من نظام ضريبة التصرفات العقارية
The article makes the Authority responsible for imposing the Law's penalties under a classification of violations set by the Board that respects proportionality, by decision of the Governor or his delegate, without preventing collection of the tax.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تتولى الهيئة إيقاع العقوبات المنصوص عليها في النظام وفقاً لتصنيف يضعه المجلس للمخالفات وما يقابلها من عقوبات، ويُراعى فيه التناسب بين المخالفة والعقوبة.
2- توقع العقوبة بقرار من المحافظ أو من يفوضه المجلس بذلك.
3- لا يحول إيقاع أي من العقوبات المنصوص عليها في النظام دون استيفاء الضريبة المستحقة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 16 explained in plain English
This article regulates how penalties are imposed under the Law, including the penalties in Article 15:
- The body and the basis: the Authority imposes penalties under a classification set by the Board (according to Article 1, the Authority's board of directors) of violations and the corresponding penalties. This classification must take into account proportionality between the violation and the penalty.
- The instrument: a penalty is imposed by decision of the Governor, or of whoever the Board authorizes to do so.
- The tax remains due: imposing any penalty does not prevent collecting the tax due. The fine does not replace the tax, and the tax remains payable alongside it.
Article 15 sets the maximum limits of some fines, such as a fine of up to three times the tax evaded, and a fine not exceeding the tax due or SAR 50,000, whichever is greater. Determining the appropriate penalty for each violation within those limits is done under the classification set by the Board. The text does not state the content of this classification.
Anyone who is the subject of a decision of the Authority under the Law and the Implementing Regulations can file a grievance with it under Article 17 within sixty days of being notified, and then object before the competent judicial body within the periods stated there. To assess a penalty decision issued against a person or business, it is advisable to consult a lawyer specialized in real estate and tax matters.
Practical example
The Governor issued a decision imposing a fine on a real estate company in Jeddah for violating the provisions of the Law. The company paid the fine, but that does not relieve it of paying the tax due on the transaction, because imposing a penalty does not prevent collecting the tax.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentAdministrative Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Administrative Law (Board of Grievances) lawyers
Lawyers who handle this kind of case
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Al-Safwa Law Office and Legal Consultancy
Frequently asked questions about Article 16 of the Saudi Real Estate Transaction Tax Law
Who imposes the fines under the Real Estate Transaction Tax Law?
The Authority imposes the penalties, by decision of the Governor or whoever the Board authorizes to do so.
How is the appropriate penalty for each violation determined?
Under a classification of violations and corresponding penalties set by the Board, which takes into account proportionality between the violation and the penalty.
Does paying the fine waive the tax?
No. Imposing any of the penalties does not prevent collecting the tax due.
More articles on Penalties for Evading Real Estate Transaction Tax
- Article 6
The article bars any step or agreement creating sham or concealed dispositions that cause the tax not to be paid correctly, and requires the tax to be calculated and collected on the real disposition.
لا يجوز لأي شخص ذي علاقة بواقعة التصرف العقاري القيام بأي إجراء أو إبرام أي اتفاق يترتب عليه إنشاء تصرفات صورية أو مستترة؛ بما يؤدي إلى عدم سداد الضريبة المستحق
- Article 14
The article treats as tax evasion the submission of forged or incorrect documents or information intended to evade tax, or any other act with that intent, and places on the taxpayer the burden of proving there was no intent.
يعد ما يأتي تهرباً ضريبياً: 1- تقديم مستندات أو معلومات أو إفادات أو سجلات مزورة، أو مصطنعة، أو غير صحيحة، أو ما في حكمها؛ تتعلق بالتصرف العقاري، وذلك بقصد الته
- Article 15
The article sets the penalties: a fine of up to three times the tax evaded, a late-payment fine of 2% per month capped at 50% plus 1% if the tax is adjusted, a general fine for other violations, and penalties for notaries.
دون إخلال بأي عقوبة أشد ينص عليها أي نظام آخر، يطبق على مخالفي النظام أو اللائحة ما يأتي: 1- غرامة لا تتجاوز ثلاثة أمثال قيمة الضريبة محل التهرب وذلك في حالة ال
- Article 18
The article assigns monitoring, inspection and detection of violations of the Law and the Implementing Regulations to employees named by decision of the Governor, gives them the necessary powers, and refers their working procedures to the Implementing Regulations.
يتولى موظفون، يصدر بتسميتهم قرار من المحافظ، الرقابة والتفتيش وضبط مخالفات أحكام النظام واللائحة. ولهم جميع الصلاحيات اللازمة لأداء مهماتهم. وتحدد اللائحة إجراء
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.