Correcting an error in a past VAT return

The situation

Errors in filed returns are corrected through ZATCA's correction process. The method and penalty exposure depend on the size of the error.

The law

• Saudi VAT Law penalty provisions: Failure to register SAR 10,000; late payment 5 percent of unpaid tax for each month or part month
• Art 77, Income Tax Law: Delay fine of 1 percent of unpaid tax for each 30 days; 25 percent of the tax difference for incorrect returns

What it means for you

Correct before ZATCA finds it. An incorrect return can attract a penalty on the difference, while voluntary correction usually lowers exposure. Example: under-declared output of SAR 20,000 VAT: pay it now to stop the 5 percent per month late payment penalty.

What to do

1. Quantify the error.
2. File the correction on ZATCA.
3. Pay any extra VAT.

Related

• Late VAT payment penalty calculation
• Nil VAT return
• Credit note timing after the 2025 change
• Unpaid supplier invoice after 12 months
• Transferring the business and VAT
• Input VAT on staff entertainment and hotels