Alinma Retail REIT says appeal related to VAT for 2018, 2019 accepted

Logo of Alinma Investment Co.

Alinma Investment Co., the fund manager of Alinma Retail REIT Fund, announced the issuance of the appeal decision related to the latter’s value-added tax (VAT) for the years 2018 and 2019.

In a statement on Tadawul today, Jan. 9, the fund manager said the financial statements for the period ended Dec. 31, 2021, noted Alinma Retail REIT’s receipt of a VAT assessment from the Zakat, Tax and Customs Authority (ZATCA) for 2018 and 2019 in an amount of SAR 18.28 million.

This was for failure to file and pay VAT returns, which consist of two parts: The value of the original tax and an amount related to fines for an error in declaration and late payment.

Alinma Retail REIT paid the aforementioned revenue tax through its asset manager, who registered the amount of the principal paid tax under the “prepaid expenses and other receivables” on the fund’s balance sheet as of Dec. 31, 2021. The value of the fines is not acknowledged as an expense on the fund.

The fund filed an appeal against the tax assessment with ZATCA, which got rejected. Another one submitted to the Saudi Tax Dispute and Violation Committee was also turned down. Finally, an appeal was filed before the Appeal Committee for Tax Violations and Disputes, which issued its decision to accept the fund’s appeal request.

Alinma Investment noted that it will address ZATCA to redeem the original amount of the paid tax, amounting to SAR 9.05 million. This is bound to have a positive impact on the cash flows of the fund, and no provision for violations or fines will be recognized on the balance sheet as they were dropped under the appeal decision.