ZATCA has announced violations and penalties in relation to e-invoicing.
The Zakat, Tax and Customs Authority (ZATCA) has given out more information regarding the penal provisions for non-compliance regarding the e-Invoicing regulations and requirements, that will be effective from 4 December, 2021 in the Kingdom of Saudi Arabia (KSA). Please find the ZATCA announcement here.
The major violations and penalties announced 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 | Initially, a warning to be issued to the taxpayer. The maximum penalty can be up to 50,000 SAR. |
| 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) | Initially, a warning to be issued to the taxpayer. The maximum penalty can be up to 50,000 SAR. |
| Deletion or amendment of e-Invoices after issuance (other than by credit/debit note | 10,000 – 50,000 |
The ZATCA clarified that the penalties are applied according to the type of violation and the number of repetition. First time violations may be treated more modestly, however repeat violations may attract larger penalties.
As per the announcement, taxpayers can now even make inquiries on Twitter on the following Twitter handle: @zatca_Care. Which is really a more taxpayer friendly move.
VAT Law & E-Invoicing
This announcement specifically mentions that these penalties are for e-invoicing related violations. However the Saudi Value Added Tax 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.
For other violations not mentioned in the announcement, the penal provisions of VAT law may apply.
TH can guide you.
TH guides SMEs, large business houses and High Networth Individuals on easy implementation of e-invoicing and other tax regulations and also assists various managements in complying with commercial and tax laws in the Kingdom.
Contact our offices below for further assistance.
