HEALTH CHECKS FOR COMPLIANCE AND RISK MINIMIZATION

Zakat, Tax and Customs Authority (ZATCA)has declared that they will extend the initiative of waiving penalties on particular taxes, which comprises Corporate Income Tax (CIT), Withholding Tax (WHT), Value Added Tax (VAT), Real Estate Transaction Tax (RETT), Excise Tax (ET), and any mistakes associated with e-invoicing. This extension will cover periods prior to and following 1 June 2022, until November 30, 2022. The deadline for making submissions under the amnesty will now end on May 31, 2023.

The penalty amnesty provides an excellent opportunity for businesses to review their past returns on VAT and other taxes, as well as take corrective action where needed. To ensure compliance and minimize the risk of penalties being imposed by the ZATCA, we recommend that businesses start reviewing their VAT returns and other taxes as soon as possible.

VAT AND RETT HEALTH CHECK

VAT return review, including the impact of the VAT rate increase, transitional provisions, application of zero-rate of VAT, Revenue reconciliation and VAT applicability on the accrued revenue, among others.

  • IT system review, including transaction mapping and VAT logic.
  • Maximize your input VAT credit recovery and managing cash flow
  • Assess the applicability of RETT on the transaction(s) after 4 October 2020, and the possibility to apply for the exemption from RETT.
  • Explore an opportunity to apply for a licensed Real Estate Developer refund.
  • Review the ongoing cases pending with ZATCA, Internal Settlement Committee (ISC), and/or Saudi General Secretariat of Zakat, Tax, and Customs Committees (GSZTCC).
  • Share recommendations on the identified issues, opportunities and to save on penalties.

ET HEALTH CHECK

  • Review the past bi-monthly ET returns, transitional returns and import customs bayans and reconcile them with the relevant supporting documents and accounting records.
  • Review the product registration file(s) along with their classification to identify products that are subject to ET and those that could be exempted from ET.

CORPORATE TAX AND ZAKAT HEALTH CHECK

  • Review the submitted Tax/Zakat return along with the financial statements to check if the returns have been filed accurately.
  • Review the current Tax/Zakat calculation methodology
  • Identify the expenses and items in Tax and Zakat calculation which may likely result in additional Tax and Zakat for the company.
  • Identify the areas which could result in potential Tax and Zakat savings for the company.
  • Review the final assessments issued by ZATCA for prior years. Review of the objection appeal memos and appellate decisions relating to the assessed years
  • Prepare a high-level analysis and findings report to advise the exposure of additional taxes and Zakat.
  • Provide recommendations on the identified issues and opportunities with the aim to explore the opportunity to apply for the amnesty and save delay fines and penalties.

WHT HEALTH CHECK

  • Review the annual withholding return, compare the annual WHT returns with the monthly WHT returns.
  • Compare the information disclosed in the Tax and Zakat declaration (movement schedules) with the annual WHT form.
  • Compare the amounts reported in the annual WHT return with that in VAT returns (for applying reverse charge VAT).
  • On a sample basis, review the treaty benefits claimed by the company when filing the monthly WHT returns to determine the strength of the company’s claim.
  • Review material contracts to ensure the appropriateness of the WHT rate applied.
  • devise the potential WHT exposure and provide quantification of the applicable delay fines and penalties which may be payable by the company.

E-INVOICING HEALTH CHECK

Review phase one of the e-invoicing process and highlight the missing data points and system requirements among others. Validate the readiness of phase two of e-invoicing and identify the gaps. Share recommendations on the issues identified for phase one and the gaps to cover for the phase two implementation.

If you’re planning to build up your business in Saudi Arabia, get in touch with analytixarabia.com and we will be happy to assist you to make these procedures simple.

We have designed an approach and methodology to support businesses in identifying and correcting errors and issues in their past VAT returns and other taxes. If you have not yet considered a review of these taxes, our advice is to carry out this exercise at the earliest opportunity

We have designed an approach and methodology to support businesses in identifying and correcting errors and issues in their past VAT returns and other taxes. If you have not yet considered a review of these taxes, our advice is to carry out this exercise at the earliest opportunity.