In accordance with the Value-Added Tax (VAT) Implementing Regulations, the General Authority for Zakat and Income has called on all businesses registered for VAT whose annual supply of taxable goods and services amounts to 40 million riyals or less, to file their tax returns for the first quarter of the year by the end of April 2018.
The Authority noted that businesses with annual supplies ranging from 375,000 to 1 million riyals that have voluntarily registered in the VAT system are required to file their tax returns and, therefore, must do so every three months.
Pursuant to the VAT Implementing Regulations, businesses with annual turnover of 40 million riyals or less must file their tax returns every three months, whereas businesses with annual supplies exceeding 40 million riyals must file their returns monthly, no later than the last day following the end of the tax period covered by the return.
The General Authority for Zakat and Income Tax has confirmed that the penalty for failing to file a tax return within the specified period is no less than 5% and no more than 25% of the tax amount that the business was required to report, in addition to a late payment penalty equivalent to 5% of the unpaid tax amount for each full or partial month for which tax remains unpaid. Entities that fail to file their returns will also face the suspension of various government services.
The Authority clarified that after an entity files its tax return, a “SADAD” invoice will be automatically issued, containing the invoice number and the amount of tax due, which the entity can pay through the “SADAD” electronic payment portal.
On the other hand, the General Authority for Zakat and Income Tax noted that businesses have the right to correct tax returns they have previously filed for a prior tax period, in accordance with the provisions of the Executive Regulations of the Value-Added Tax Law, provided that the Authority is notified within a period not exceeding twenty days from the date of filing the return.
The Authority clarified that businesses can change the filing frequency of their tax returns—from monthly to quarterly or vice versa—in the event of an error in recording annual financial data, through the business’s account on the Authority’s online portal.
The General Authority for Zakat and Income recently announced that 95% businesses with revenues exceeding 40 million riyals are required to file their tax returns on time.
