Wrong refund claims and penalties
If our refund claim is wrong, is there a penalty?
The situation
Incorrect claims can lead to penalties on the difference, such as 25 percent of the tax difference under general rules for incorrect returns.
The law
- 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
- Saudi VAT Law penalty provisions: Failure to register SAR 10,000; late payment 5 percent of unpaid tax for each month or part month
What it means for you
Example: an over-claim of SAR 20,000 could add a further SAR 5,000 at 25 percent of the difference, plus delay fines on any amount ZATCA then collects. The safest route is to remove doubtful invoices before filing and to correct mistakes yourself as soon as you find them, rather than waiting for a ZATCA review.
What to do
- Review supporting documents.
- Remove doubtful invoices.
- Correct errors quickly.
We can do this for youVAT refund claim for excess input VAT: exporters, start-ups and capital spend: SAR 3,500