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This Zakat, Tax and Customs Authority (ZATCA) guide clarifies the Decision to reclassify Value-Added Tax field violations, effective from 30 January 2022. It outlines a new penalty framework that prioritises taxpayer education, beginning with a notice and a correction period of up to three months before fines are imposed. The guide details escalating penalties for repeat offences within a 12-month cycle. Covered violations include failures in tax invoicing, e-invoicing, record-keeping, and obstructing ZATCA employees. The decision's scope specifically excludes non-field violations such as tax evasion, failure to file returns, or late payment.

Simplified Guide
The Decision to Reclassify the Value-Added Tax Field Violations

Zakat, Tax and Customs Authority

November 30, 2022

1. Highlights of the Decision

2. What Is Not Covered by the Decision?

3. Classification of Violations According to the New Decision

4. Illustrative Examples of the Decision to Reclassify VAT Violations

First: Violation of non-compliance to issue a tax invoice

Second: Violation of not issuing and keeping invoices and notes electronically

Third: Violation of not keeping invoices, records and accounting documents

Fourth: Violation of Preventing or hindering the Authority's employees from performing their job duties and tasks

Fifth: Violation of incorrectly calculating the due tax

Sixth: Violation of not notifying the Authority of any malfunctions that hinder the process of issuing invoices and electronic notes

Seventh: Violation of deleting invoices or electronic notes

Eighth: Violation of not including the QR code in the e-invoice

Ninth: Violation of including any of the prohibited functions in the e-invoicing system used to issue and save invoices electronically

Tenth: An illustrative example of what was stated in the decision regarding calculating fines for violations that have been repeated 12 months after the taxpayer committed it

The Zakat, Tax and Customs Authority ("ZATCA", "Authority“) has issued this Guide for the purpose of clarifying certain tax treatments concerning the implementation of the statutory provisions in force as of the Guide's issue date. The content of this Guide shall not be considered as an amendment to any of the provisions of the Laws and Regulations applicable in the Kingdom.

Furthermore, the Authority would like to highlight that the clarifications and indicative tax treatments prescribed in this Guide, where applicable, shall be implemented by the Authority in light of the relevant statutory texts. Where any clarification, interpretation or content provided in this Guide is modified - in relation to unchanged statutory text - the updated indicative tax treatment shall then be applicable prospectively, in respect of transactions made after the publication date of the updated version of the Guide on the Authority's website.

Highlights of the Decision

First: Violation of non-compliance to issue a tax invoice E-Invoice Violations

Second: Violation of not issuing and keeping invoices and notes electronically Illustrative Examples of the Decision to Reclassify VAT Violations

Illustrative Examples of the Decision to Reclassify VAT Violations

Third: Violation of not keeping invoices, records and accounting documents Illustrative Examples of the Decision to Reclassify VAT Violations

Fourth: Violation of Preventing or hindering the Authority's employees from performing their job duties and tasks Illustrative Examples of the Decision to Reclassify VAT Violations

Fifth: Violation of incorrectly calculating the due tax Illustrative Examples of the Decision to Reclassify VAT Violations

Sixth: Violation of not notifying the Authority of any malfunctions that hinder the process of issuing invoices and electronic notes Illustrative Examples of the Decision to Reclassify VAT Violations

Seventh: Violation of deleting invoices or electronic notes Illustrative Examples of the Decision to Reclassify VAT Violations

Eighth: Violation of not including the QR code in the e-invoice Illustrative Examples of the Decision to Reclassify VAT Violations

Ninth: Violation of including any of the prohibited functions in the e-invoicing system used to issue and save invoices electronically Illustrative Examples of the Decision to Reclassify VAT Violations

Tenth: An illustrative example of what was stated in the decision regarding calculating fines for violations that have been repeated 12 months after the taxpayer committed it Illustrative Examples of the Decision to Reclassify VAT Violations

Contents

Highlights of the Decision