TaxSavvySA

Late VAT registration penalty

I crossed the threshold 6 months ago and did not register. What now?

The situation

Failure to register after exceeding the threshold carries a SAR 10,000 penalty, and VAT is still due on sales from the date registration should have started.

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
  • Saudi VAT Law and VAT Implementing Regulations, registration rules: Mandatory registration above SAR 375,000 of taxable supplies; voluntary above SAR 187,500; apply within 30 days

What it means for you

Register now and expect ZATCA to set an effective date from when you crossed. You may owe output VAT on past sales even if you did not charge it; then the VAT is treated as included in the price. Example: SAR 230,000 of sales since then: VAT included = 230,000 x 15/115 = SAR 30,000.

What to do

  1. Register at once.
  2. Compute VAT on past sales.
  3. File the back returns and pay.

Waiting increases the 5 percent per month late payment penalty.

We can do this for youVAT registration with ZATCA: mandatory, voluntary and non-resident registration: SAR 1,500

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