The General Authority of Zakat and Tax (GAZT) of Saudi Arabia is moving swiftly towards implementation of the Value Added Tax (VAT) by 1 January 2018
Penalties for businesses if non-compliance with VAT Law.
• Failure to register for VAT – A penalty equivalent to double the amount of VAT payable
• Erroneous filing of VAT return – A penalty of not be less than 50% of the undeclared net VAT amount
• Overstating the refundable VAT amount – A penalty of not be less than 50% of the VAT refund claimed
• Delay in submission of VAT return – A penalty equivalent to a sum of SAR1,000 (US$267) and an additional amount equivalent to 5% to 20% of the VAT payable, which will vary depending on the number of days of delay in the filing of the VAT returns
• Nonregistration of invoice with the authority and charging VAT by an unregistered person – A penalty equivalent to SAR1,000 or double the amount of the VAT charged, whichever is higher
• Failure to maintain records under the VAT – A penalty equivalent to SAR1,000 or 2% of the average value of the monthly VAT supply, whichever is higher
• Non-compliance of the GAZT advice to submit requested information – A penalty of SAR1,000 or 2% of the average value of the monthly taxable supply, whichever is higher. However, the amount of fine shall not exceed SAR20,000 (US$5,333)
