In brief
The transferor is responsible for paying RETT to ZATCA, into ZATCA's specified account and referenced to the transaction number, and assessed tax is payable on the Article 5 timetable. The transferee becomes jointly and severally liable where ZATCA proves it caused the failure to pay, including through an arrangement to reduce or delay the tax, or an act that breaches the Regulations' restrictions. ZATCA then notifies both parties.
In Saudi practice, buyers often pay the RETT invoice. It is a common commercial term, and ZATCA’s portal accepts payment from anyone. Legally, though, the tax belongs to the seller. Article 7 explains why that matters, and when the buyer can be pursued as well.
The Provision: Exact Text
What It Means in Plain English
On the question of who is liable for RETT: the transferor (seller, donor or grantor) owes it to ZATCA. The buyer can be made jointly liable, but only if ZATCA proves the buyer caused the tax to go unpaid, be reduced or be paid late. A contract that puts the cost on the buyer does not change the seller’s legal position with ZATCA.
Breaking Down the Provision
7(A): The transferor pays, through ZATCA’s system
Payment goes to ZATCA’s specified account, quoting the transaction number generated when the transaction is registered. Tax arising from an assessment follows the Article 5 timetable, and fines start under the Law. A later assessment of a transaction is not treated as a new transaction with a fresh payment period. The original deadline governs.
7(B): When the transferee becomes jointly liable
ZATCA must prove the transferee caused the shortfall. The Regulations give two examples, and the words “for example” show the list is not exhaustive:
- Collusion. An arrangement between the parties to reduce the tax or delay payment.
- The transferee’s own breach. An act by the transferee that breaches the Regulations’ restrictions. A gift recipient passing on the property within three years, or a contributor selling locked shares, are clear cases.
Joint and several liability means ZATCA can collect the whole amount from either party.
7(C): Notifications
ZATCA notifies both parties of the amount and the payment date. A jointly liable transferee must tell ZATCA when it pays.
ZATCA’s Position
The Guideline confirms that an agreement for the buyer to bear RETT “does not relieve the assignor of their responsibility toward” ZATCA. Its examples:
- Example 13. The parties agree to declare SAR 1,200,000 on a sale actually worth SAR 2,000,000. ZATCA assesses on SAR 2,000,000, treats the buyer as jointly liable and notifies both parties.
- Example 14. A buyer presents a first-home support certificate that proves incorrect, so no RETT is paid. The buyer is jointly liable as the cause of the non-payment.
Worked Examples
Example 1: The buyer agreed to pay but did not
The sale agreement says the buyer pays the RETT of SAR 150,000. The buyer pays only part of it, and the notary completes the transfer through a procedural error. ZATCA pursues the seller for the balance. The seller’s remedy against the buyer lies in the contract, not with ZATCA.
Example 2: Gift recipient breaks the three-year rule
A son sells gifted land to an unrelated buyer within three years. The father, as transferor of the original gift, is liable for RETT on it. Because the son’s act caused the breach, ZATCA can also hold the son jointly liable under Article 7(B)(2).
Example 3: Understated price
On ZATCA’s Example 13 facts, the shortfall is 5% × SAR 800,000 = SAR 40,000, plus fines. ZATCA notifies both parties and can collect from either.
Grey Areas
| Situation | Our view |
|---|---|
| Buyer unaware the seller understated the price | ZATCA must prove the buyer caused the shortfall. A buyer acting in good faith, with no arrangement in place, should not be jointly liable. |
| Company receiving property under Article 3(a)(11) fails its audit | The company’s failure broke the exemption. Joint liability under Article 7(B)(2) is arguable. |
| Several sellers, such as heirs | Each is a transferor for their share. ZATCA’s FAQ notes that heirs can split the invoice or one heir can pay the whole amount. |
Compliance Checklist
- As seller, register the transaction and make sure the invoice is paid before notarization, whoever funds it.
- As buyer, make sure your actions, such as onward transfers or share sales, do not breach exemption conditions you know about.
- Put RETT allocation, indemnity and cooperation clauses in sale agreements.
- If you are notified as jointly liable, pay or object within the deadlines and notify ZATCA of any payment.
Common Mistakes
- Sellers assuming a “buyer pays RETT” clause moves the liability.
- Buyers taking part in price understatements and assuming only the seller is at risk.
- Recipients of exempt transfers ignoring conditions they can breach.
The Bottom Line
Article 7 puts the liability on the seller and lets ZATCA reach the buyer only where the buyer caused the problem. For sellers, the lesson is to control the payment. For buyers, it is to avoid becoming part of the problem.
Key takeaways
- The transferor, such as the seller, donor or grantor of a long usufruct, is legally responsible for paying RETT to ZATCA.
- A contract clause making the buyer pay RETT is valid between the parties, but it does not relieve the transferor of liability to ZATCA.
- Payment is made to ZATCA's specified bank account, referenced to the transaction number ZATCA issues.
- The transferee becomes jointly and severally liable only where ZATCA proves the transferee caused the non-payment, reduction or delay.
- Two examples are given: an arrangement between the parties to reduce or delay the tax, and an act by the transferee that breaches the Regulations' restrictions.
- When joint liability applies, ZATCA notifies both parties. A jointly liable transferee must tell ZATCA when it pays.
Frequently asked questions
Who pays RETT in Saudi Arabia, the buyer or the seller?
The seller (transferor) is legally responsible to ZATCA under Article 7 of the RETT Law and Regulations. The parties can agree that the buyer bears the cost, and anyone may pay the invoice, but the seller remains liable to ZATCA if it is not paid.
When can the buyer be held liable for RETT?
When ZATCA proves the buyer caused the tax not to be paid, to be underpaid, or to be paid late. Examples include agreeing with the seller to declare a lower price, or the buyer doing something that breaches the Regulations' restrictions, such as passing on a gifted property within three years.
Is the buyer liable if a first-home certificate turns out to be invalid?
It can be. ZATCA's Guideline, Example 14, holds a buyer jointly liable where the buyer presented a first-home eligibility certificate that proved incorrect and RETT went unpaid as a result.
How is RETT paid?
The transferor registers the transaction on ZATCA's portal. ZATCA issues an invoice with a transaction number, and payment is made to ZATCA's specified bank account against that number. For notarized transactions, the notary checks payment electronically before completing the transfer.
What should a buyer do if ZATCA holds it jointly liable?
Pay the amount by the date ZATCA notifies, and inform ZATCA once paid, as Article 7(C) requires. Then consider recovering the amount from the seller under the contract, and whether to object to the assessment within the objection deadline.
Sources
- ZATCA — Real Estate Transaction Tax Law and Implementing Regulations
- ZATCA — Detailed Guideline for the Real Estate Transaction Tax (Version 6, May 2026)Sections 4.5, 6 and 10.3; Examples 13–14
Based on the RETT Law (Royal Decree No. M/84, effective 10 April 2025), the RETT Implementing Regulations (ZATCA Board Resolution No. 01-03-25 dated 24 March 2025, unofficial English translation) and ZATCA's Detailed RETT Guideline Version 6 (May 2026). The Arabic text prevails. This article is general information, not advice on any specific transaction. dariba.co is an independent knowledge platform and is not affiliated with ZATCA.
