Saudi Arabia’s Zakat, Tax, and Customs Authority (ZATCA) has started conducting tax audits on numerous taxpayers in the country, focusing particularly on VAT and real estate transaction tax (RETT). VAT revenue accounts for almost 70% of the total tax revenue collected by ZATCA, leading to an increased focus on VAT audits. Larger taxpayers, including non-resident companies, can expect an audit once every one to three years, based on transaction volume and value, or VAT refund requests. The draft Zakat and Tax Procedural Law may introduce penalties for erroneously requested VAT refunds. Taxpayers should review their tax compliance matters before claiming substantial refunds. The scope of VAT audits typically includes financial statements, trial balances, sales and purchase listings, sample invoices, and credit notes.
Source Deloitte
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