Third Edition | May 2026

Economic Activity: An activity practiced on a continuous and regular basis, including commercial, industrial, agricultural, professional, or service activities, or any use of tangible or intangible property, and any other similar activity(1). Input Tax: The tax borne by a taxable person in relation to goods or services supplied to them or imported for the purposes of carrying out an economic activity(2). 3. Who is a Real Estate Developer? A Developer is defined as a legal person licensed to practice the activity of owning or leasing real estate for the purpose of developing and selling or leasing it, as the case may be. This includes both master and sub-developers.(3)Accordingly, a developer differs from a construction contractor in terms of the ownership of the property under development; whereas a contractor is defined as a person who provides construction-related services (supply of services or supply of both goods and services together), which include building, construction, and real estate works. This is typically carried out under a contract with a client to deliver the entire building, a part thereof, or engineering works and utilities, etc., without being the owner of the property. (1). Article (1), Definitions, Unified VAT Agreement (2). Article (1), Definitions, Unified VAT Agreement (3). Article (1), Law on Sale and Lease of Off-plan Real Estate Projects 4. Who is an Eligible Real Estate Developer? Pursuant to the provisions of Article (70) of the VAT Implementing Regulations, Paragraph (14) thereof stipulates that licensed real estate developers -in accordance with the controls and conditions specified by the Authority- are considered among the categories entitled to apply for registration as an " Eligible person" to refund VAT paid by them on goods and services received in the Kingdom related to that economic activity. His Excellency the Minister of Finance and Chairman of the Board of Directors of the Zakat, Tax and Customs Authority issued these controls under Ministerial Resolution No. (1754) dated 15 Rabi’ II 1442 H, which are stated as follows: First: The person practicing the real estate development activity must take one of the following legal forms: 1. A sole proprietorship under a commercial registration. 2. Any legal form under the Companies Law. 3. A real estate investment fund. 4. A cooperative society or institution. A person practicing real estate development in any form other than these aforementioned legal forms is not entitled to apply for registration until one of them is adopted, even if all other conditions are met. For example: If a natural person practicing real estate development activities submits an application to the Authority to be registered as an " Eligible person" for refund, the application will not be accepted because they are a natural person and do not meet one of the legal forms mentioned above, until they rectify their status and adopt one of these legal forms. Second: The license required to practice real estate development activity -issued by the Ministry of Commerce or any competent authority in the Kingdom- must be valid at the time of application. Accordingly, the Authority will not accept any application if the real estate developer’s license is invalid at the time of submission, in accordance with the classification of activities approved by the Ministry of Commerce and competent authorities.