Through these amendments, the Authority aims to set a minimum and upper limit for the fine for not submitting the return in the event of a zero or credit return, with the inclusion of a provision in the case of repetition, and to set an upper limit for calculating the late payment fine, and to include the late payment fine for persons who unlawfully recover the tax from Persons eligible for refund as determined by the regulations.
The Authority has also added new provisions that give it the right to seize the money of the taxable person in the event of non-payment of final tax dues, according to certain conditions and controls that the Authority is committed to. Below are the details of the new amendments and additions to the value-added tax system that are currently being offered on the “Istishla” platform:-
Set a minimum fine for not submitting a declaration
Article 42 of the system stipulates: “Anyone who does not submit a tax return within the period specified by the regulations shall be liable to a fine of no less than zero and no more than 25% of the value of the tax that he should have declared.” The Authority intends to amend this article to read: “He shall be punished.” Anyone who fails to submit a tax return within the period specified by the Regulations shall be liable to a fine of 2% of the value of the tax due that he was required to declare, whether the due tax resulted from a declaration submitted by the taxable person or as a result of an assessment issued by the Authority for each month or part of it until the date of filing the declaration, up to a maximum of 24% of the value of the tax that he was required to declare, and the fine begins to be calculated starting from the day following the end of the period specified for the submission of the declaration stipulated in the regulations.
The amendment also stipulates that the minimum fine for not submitting a return within the period specified by the regulations is 1,000 riyals for a taxable person who is obligated to submit a tax return for a tax period of one month, and 500 riyals for a taxable person who is obligated to submit a tax return for a tax period of more than one month. One month, as determined by the regulations, provided that the fine is doubled in the event of a repeat violation during the same calendar year.
Determine a minimum and maximum penalty for non-payment of the tax due
The Authority wishes to amend Article 43 of the system, which stipulates that anyone who does not pay the tax due within the period specified by the regulations will be penalized with a fine equivalent to 5% of the value of the unpaid tax for each month or part thereof for which the tax was not paid.
The Authority intends to amend this article so that whoever does not pay the due tax that must be paid within the period specified by the regulations will be penalized with a fine equivalent to 2% of the value of the unpaid tax for each month or part thereof for which the tax was not paid, with a maximum of 50% of the value of the unpaid tax. Provided that the fine is calculated starting from the day following the expiry of the period specified by the Regulations for payment of the tax due according to the tax return, or from the day following the due payment of the tax upon import by any person, unless its payment is deferred to be through the tax return of the taxable person in accordance with the provisions of the Law and the Regulations. .
The same penalty stipulated in this paragraph shall be imposed on anyone who unlawfully recovers a tax amount from among the persons eligible for a refund – according to what is determined by the regulations, and its calculation begins from the day following the date on which the amount was recovered.
The amendment also stipulated that an additional fine equivalent to 1% of the unpaid tax value be imposed for each month or part thereof in the event that the tax due was amended by the Authority and the amendment resulted in a due tax payable, provided that the fine begins to be calculated after 30 days have passed from the date of Notification of the amendment or the lapse of 30 days from the date the amendment of the system becomes effective, whichever occurs later. The same penalty stipulated in this paragraph shall be imposed on anyone who unlawfully recovers an amount of tax from the persons eligible for a refund as determined by the regulations, and its calculation begins after the lapse of 30 days from the date of his notification of the refund. the amount.
Property reservation
The Authority has prepared a new article that allows it to seize property, and this article stipulates that in the event that the taxable person does not pay the final amounts due under the provisions of the Law and the Regulations, the Authority may seize his movable and immovable property that is legally permissible to seize, provided that it begins the sequestration procedures after 60 days have passed The taxable person shall receive a notice from it of the intention to reserve, whether through the use of electronic means or any other legal means.
The amended article also stipulates that any natural or legal person, public or private, including banks and financial institutions who are in possession of the seized asset, shall deliver the asset to the Authority when the Authority so requests, and the bank and financial institutions shall refrain from allowing any withdrawals or other payments from the person’s account. The taxable person is in the bank after the bank receives a notice of the Authority’s intention to seize his account, and if these entities do not do so, they are obligated to pay an amount to the Authority equal to the value of the property in his possession and not exceeding the amount for which the seizure was made.
This article excluded the tools used by the taxable person in his trade, his belongings and personal furniture from seizure, with a maximum limit not exceeding 300,000 riyals.
Sale of seized property
The new article also stipulates that the Authority, through the competent authority, sells the seized property in accordance with the provisions of the seizure mentioned in the system, and from the sale value of the seized property, the seizure expenses are paid first, then the tax and fines, and any remaining amount is returned to the taxable person.
The sale of the property of the taxable person shall be suspended during the period of administrative review or on the basis of which the seizure was made, with the exception of property subject to damage, and property that the taxable person requests to sell.
Withholding of funds due to the taxable person
The new amendment granted the Authority, after signing the attachment, the right to issue notices to third parties, including the employer, banks or financial institutions, instructing them to pay directly to the Authority for any amounts owed by the third party to the taxable person on or after the date of receipt of the attachment notice.
The article also stipulates that the attachment does not take place on the value of the monthly alimony that the taxable person is obligated to, nor his living expenses that are required by the provisions of other applicable laws, and the responsibility of the person who adheres to the provisions contained in this article is also released from any obligation before the taxable person or any other person. Relates to the value of the seized property from the time of his commitment.