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Announcement by Alinma Investment Company regarding a material development of Alinma Retail REIT Fund

16 Jumada II 1444 AH H - 09 January 2023 G

ELEMENT LIST	EXPLANATION
Introduction:	Alinma Investment Company in its capacity as the Fund Manager of Alinma Retail REIT Fund announces the issuance of the appeal decision related to VAT for the years 2018 and 2019.
Description of the Event:	With reference to what was stated in note no.8 of the financial statements for the period ending on December 31, 2021,which includes the fund’s receipt of a VAT assessment from the ZATCA “Authority” for the years 2018 and 2019 in an amount of 18,276,974 Saudi riyals for failure to submit and pay VAT returns, The above-mentioned assessment consists of two parts, which are the amount of the original tax, and an amount related to a fine for error in declaration and a fine for late payment, and since The fund supplied the aforementioned revenue tax through the property manager, the amount of the principal paid tax has been recorded in the item “Prepayment and other receivables” in the fund’s financial position as of December 31, 2021, and the amounts of fines are not acknowledged as an expense on the fund. The fund filed an objection to the assessment with ZATCA. After the objection was rejected, an objection was submitted to the Committee for the Resolution of Tax Violations and Disputes, which was also rejected. The Fund then requested an appeal to the Appeal Committee for Tax Violations and Disputes, which issued its decision to accept the appeal submitted by the Fund.
The Impact Caused by the Event	The fund manager will address ZATCA to recover the original amount of the paid tax amounting to 9,047,230 Saudi riyals, which will have a positive impact on the cash flows of the fund, and no provision for violations or fines will be acknowledged because they were dropped based on the appeal decision.

ELEMENT LIST

EXPLANATION

Introduction:

Alinma Investment Company in its capacity as the Fund Manager of Alinma Retail REIT Fund announces the issuance of the appeal decision related to VAT for the years 2018 and 2019.

Description of the Event:

With reference to what was stated in note no.8 of the financial statements for the period ending on December 31, 2021,which includes the fund’s receipt of a VAT assessment from the ZATCA “Authority” for the years 2018 and 2019 in an amount of 18,276,974 Saudi riyals for failure to submit and pay VAT returns, The above-mentioned assessment consists of two parts, which are the amount of the original tax, and an amount related to a fine for error in declaration and a fine for late payment, and since The fund supplied the aforementioned revenue tax through the property manager, the amount of the principal paid tax has been recorded in the item “Prepayment and other receivables” in the fund’s financial position as of December 31, 2021, and the amounts of fines are not acknowledged as an expense on the fund. The fund filed an objection to the assessment with ZATCA. After the objection was rejected, an objection was submitted to the Committee for the Resolution of Tax Violations and Disputes, which was also rejected.

The Fund then requested an appeal to the Appeal Committee for Tax Violations and Disputes, which issued its decision to accept the appeal submitted by the Fund.

The Impact Caused by the Event

The fund manager will address ZATCA to recover the original amount of the paid tax amounting to 9,047,230 Saudi riyals, which will have a positive impact on the cash flows of the fund, and no provision for violations or fines will be acknowledged because they were dropped based on the appeal decision.