The new VAT law will be implemented in Saudi Arabia by 1 January 2018. In the meantime, the General Authority of Zakat and Tax (GAZT) taking necessary sessions to build up awareness among business groups.
During this awareness sessions, the GAZT have discussed about the penalties that will apply in case of non-compliance which are as follows:
- A penalty of twice the amount of VAT payable will apply in case of failure to register for VAT;
- A penalty of not less than 50% of the undeclared net VAT amount will apply in case of inaccurate filing of VAT return;
- A penalty equivalent to SAR1,000 or 2% of the average value of the monthly VAT supply, whichever is higher will apply in case of failure to maintain records under the VAT;
- A penalty of not 50% of the VAT refund claimed will apply in case of overstating the refundable VAT amount;
- A penalty equivalent to a total of SAR1,000 (US$267) and an additional amount equivalent to 5% to 20% of the VAT payable will apply in case of delay in submission of VAT return. Although, the amount of penalty will depend upon the number of days of delay in the filing of the VAT returns;
- A penalty equivalent to SAR1,000 or double the amount of the VAT charged, whichever is higher will apply in case of non-registration of invoice with the authority and charging VAT by an unregistered person; and
- A penalty of SAR1,000 or 2% of the average value of the monthly taxable supply, whichever is higher will apply for non-compliance with the information requested by GAZT to submit . However, the amount of the penalty shall not exceed SAR20,000 (US$5,333)
