ZATCA announces violations and penalties in relation to e-Invoicing in KSA
The Zakat, Tax and Customs Authority (ZATCA) have provided further details surrounding the penalties that will apply with respect to taxpayers who are non-compliant with the e-Invoicing regulations and requirements that will commence on 4 December, 2021 in the Kingdom of Saudi Arabia (KSA).
The key violations and penalties as per the announcement are as follows:
Violations |
Penalties (SAR) |
Non-issuance/ Non-archiving of e-Invoices |
5,000 - 50,000 |
Not including the QR Code in the simplified tax invoices |
|
Not informing the ZATCA of any malfunction that hinder the issuance of e-Invoices |
Initially, a warning to be issued to the taxpayer. The maximum penalty can be up to 50,000 SAR. |
Not including the buyer VAT registration number on the e-Invoices (wherever required to be mentioned) |
|
Deletion or amendment of e-Invoices after issuance (other than by credit/debit note |
10,000 - 50,000 |
The ZATCA has clarified that all penalties are applied according to the type of violation and the number of times it is repeated. Therefore, first time violations are likely to be treated more modestly, whereas repeat violations are likely to attract larger penalties.
Interestingly, as per the announcement, taxpayers can now make inquiries on Twitter on the following Twitter handle: @zatca_Care.
Deloitte’s view
While the KSA Value Added Tax (VAT) Law provides a penalty for failure to maintain books and records as per the VAT regulations and a general penalty of up to 50,000 SAR, the recent announcement specifically clarifies the penalties for violations in relation to e-Invoicing. In our view, lower penalty/warning for first time violations should be welcomed by taxpayers. However, it is still unclear whether the penalties as prescribed will apply on a “per invoice” basis or on a “per tax period” basis.
For any violations not referred to in the announcement, taxpayers would still need to refer to the general penalties that may apply under the KSA VAT Law.
We are in constant communication with the ZATCA and will keep you posted on further developments.
Deloitte Intesa – e-Invoicing compliance solution
Deloitte is able to help taxpayers address their e-invoicing needs through a comprehensive and compliant solution – Intesa. If you wish to discuss any aspect of e-Invoicing , please contact your usual Deloitte adviser.
