In brief
ZATCA may verify a transaction's value, particularly for related persons, split consideration, non-cash consideration, unknown value, undisclosed transactions and suspected manipulation. The parties may submit an accredited valuation. If the value is below fair market value, ZATCA can assess at fair market value. It must demand the tax within three years of a disclosed transaction, or of learning of an undisclosed one. Breaches of exemption conditions are not subject to those limits, and final unpaid amounts are collected under the Income Tax Law.
RETT is self-assessed. The seller declares the value on ZATCA’s portal, pays 5% of it, and the notary completes the transfer. Article 8 is ZATCA’s power to check that figure afterwards, and it sets the limits on that power.
The Provision: Exact Text
What It Means in Plain English
RETT reassessment works as follows. ZATCA can check whether the value you declared reflects fair market value, especially in higher-risk situations. If it is too low, ZATCA can reassess at market value. You can submit your own accredited valuation. ZATCA has three years from the transaction (or from finding out about an undisclosed one) to demand the extra tax, but no time limit where you breach an exemption’s conditions.
Breaking Down the Provision
8(A): When ZATCA looks closely
The six situations are examples, as the words “in particular” show. ZATCA can verify any transaction, but these are where it focuses:
| Trigger | Why it is a risk |
|---|---|
| Related persons (as defined by reference to Income Tax Law Art. 64 and the TP Bylaws) | The price may not be at arm’s length |
| Consideration split between real estate and other assets | Value may be shifted away from the property |
| Non-cash consideration (shares, swaps, debt relief) | There is no cash figure to check against |
| Unknown or unspecified value | There is nothing to test |
| Unnotarized or undisclosed transactions | ZATCA never saw the deal |
| Suspected manipulation or evasion | The value may be deliberately understated |
8(B): Your valuation
The transferor or transferee can submit a valuation by an accredited valuer. In practice, an accredited valuation prepared at the time of the transaction is the strongest defence against a later reassessment.
8(C): How ZATCA sets fair market value
ZATCA can use approved real estate indicators, such as Ministry of Justice transaction data and market indices, or appoint an approved valuer. The Guideline defines fair market value as comparable sales of similar real estate between independent parties, taking account of the nature of the transaction, market conditions and the actual transfer date.
8(D) and (E): Time limits
- Disclosed transactions: three years from the transaction date.
- Undisclosed or undocumented transactions: three years from when ZATCA learns of them. Concealment does not start the clock.
- Breached exemptions: not limited by these periods.
8(F) to (H): Notification, finality and collection
ZATCA notifies the person who owes the tax or fines. An amount becomes final when the objection period lapses, on a final committee decision, or on settlement. Final unpaid amounts are collected using the Income Tax Law’s collection provisions.
ZATCA’s Position
In the Guideline’s Example 8, land is sold for SAR 1,000,000 between relatives, but its fair market value is SAR 1,500,000. RETT is charged on SAR 1,500,000. The Guideline also confirms that the financing cost or implicit profit in licensed financing arrangements is not part of the value (Example 9).
Worked Examples
Example 1: Related-party sale
A father sells a building to his son’s company for SAR 3,000,000. An accredited valuation puts it at SAR 4,200,000. ZATCA reassesses: 5% × SAR 4,200,000 = SAR 210,000, an additional SAR 60,000 plus fines under the Law. Had the father obtained and declared the accredited valuation upfront, there would have been no assessment and no fines.
Example 2: Undisclosed transfer discovered later
An informal 2025 sale is discovered by ZATCA in 2029. The three-year window runs from 2029, so ZATCA can demand the tax until 2032. The 2% monthly fine has been running since the original payment deadline in 2025 and is capped at 50%.
Example 3: Breach in year five
An Article 3(a)(18) group transfer made in 2026 is breached in 2030. Article 8(E) means the three-year limit from 2026 gives no protection. The tax on the original transfer is payable within 30 days of the 2030 breach.
Grey Areas
| Situation | Our view |
|---|---|
| Your valuation and ZATCA’s indicators differ | Article 8(B) gives you the right to submit a valuation, not a guarantee that it prevails. Robust comparables matter most. |
| Exempt transaction registered at a nominal value | If the exemption later fails, ZATCA can apply fair market value. Register a realistic value from the start. |
Compliance Checklist
- For any of the six triggers, obtain an accredited valuation at the time of the transaction.
- Declare the full consideration, including non-cash items.
- Allocate mixed consideration between real estate and other assets on a documented basis.
- Keep the valuation and comparables for at least five years. For conditional exemptions, keep them for five years after the condition period ends.
- If notified of an assessment, diary the objection deadline (see Article 13).
Common Mistakes
- Declaring book value or a family price for related-party transfers.
- Assuming time protects undisclosed transactions. The clock starts when ZATCA finds out.
- Relying on the three-year limit for conditional exemptions.
The Bottom Line
Article 8 makes the declared value provisional for three years, and longer where a transaction was not disclosed or an exemption’s conditions are breached. An accredited valuation at the time of the transaction is the most effective protection. It costs far less than defending a reassessment years later.
Key takeaways
- ZATCA may verify value in six highlighted situations: related persons, split consideration, non-cash consideration, unknown value, unnotarized or undisclosed transactions, and suspected manipulation or evasion.
- The transferor or transferee may submit a valuation prepared by an accredited valuer.
- If the declared value is below fair market value, ZATCA can assess at fair market value using approved real estate indicators or an approved valuer.
- ZATCA must demand additional tax within three years of a disclosed transaction, or within three years of learning of an undisclosed one.
- Those periods do not limit ZATCA's right to collect tax when an exemption's conditions are breached (Article 8(E)).
- Amounts become final when the objection period expires, on a final committee decision, or on settlement. Unpaid final amounts are collected using the Income Tax Law's collection provisions.
Frequently asked questions
Can ZATCA change the value I declared for RETT?
Yes. Under Article 8 of the RETT Implementing Regulations, ZATCA may verify the value and, if it is below fair market value or was never disclosed, assess RETT at fair market value. It uses approved real estate indicators or an approved valuer. This is most likely for related-party, non-cash and undisclosed transactions.
How long does ZATCA have to reassess RETT?
Three years from the date of a disclosed transaction, or three years from when ZATCA learns of an undisclosed or undocumented one. There is no such limit where an exemption's conditions are later breached (Article 8(E)).
Can I challenge ZATCA's valuation?
Yes. During verification you can submit a valuation from an accredited valuer (Article 8(B)). After an assessment, you can object within the deadlines under the Zakat, Tax and Customs Committees' rules, which are applied through Article 13.
When does a RETT assessment become final?
When the objection period expires without an objection, when a final decision is issued under the Committees' rules, or when a settlement is reached with ZATCA (Article 8(G)).
How does ZATCA collect unpaid RETT?
Final unpaid tax and fines are collected using the collection provisions of the Income Tax Law (Articles 73 to 75, as referenced in Article 8(H)), after ZATCA notifies the person concerned.
Sources
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.
