The General Authority for Zakat and Income has published the draft Value-Added Tax (VAT) law on its website. The draft law consists of 12 chapters and 77 articles, and is set to take effect in early January 2018.

The draft law stipulates that the Authority shall be responsible for administering, auditing, assessing, and collecting value-added tax.

Any person who fails to submit a registration application within the time periods specified in the regulations shall be subject to a fine of 10,000 riyals; this penalty does not preclude the person from paying the tax owed. Any taxable person who makes an error in their tax return by declaring a tax amount lower than the amount actually due shall be subject to a fine of 50% of the underreported tax amount. Any person who submits a tax refund claim for an amount exceeding what they are entitled to shall be subject to a penalty equal to 50% of the excess amount claimed. As for those who fail to pay their taxes, they shall be penalized with a payment of 1,000 riyals plus 5% of the unpaid tax if the delay does not exceed 30 days, 10% if the delay exceeds 30 days, 20% if the delay exceeds 90 days, and 25% if the delay exceeds 365 days.