Saudi Arabia issued Royal Decree No. M/113 of 25 July 2017 amending the country’s income tax law with regard to penalties and appeals procedures.
According to the Decree, the General Authority of Zakat and Tax is expressly given the power to impose tax penalties. The period to appeal an assessment and an initial decision is reduced from 60 days to 30 days. The obligation to pay the tax at dispute or a guarantee prior to an appeal shall be removed, the payment being necessary only for the amount of the tax not in dispute. The procedure for further appeal to the complaints appeal committee is eliminated – taxpayers can still try to appeal to the board, but the board is not obliged to accept.
The time limit to make an appeal has been set at a period of five years after the due date for the disputed tax or within five years after the relevant notification, although in certain cases the committees may go beyond the deadline if the taxpayer has valid reasons.
The new rules establishe two new appeal committees which are as follows:
-The Committee for Resolution of Tax Violations and Disputes, replacing the current Preliminary Appeal Committee; and
-The Appeal Committee for Tax Violations and Disputes, replacing the current Higher Appeal Committee
However, until the new appeal committees are established, the current appeal committees will continue to function.
