ZATCA Penalties: Saudi Tax and Customs Penalties 2026

The Zakat, Tax and Customs Authority (ZATCA) enforces tax and customs law in Saudi Arabia. This guide summarises common penalties for VAT, excise, corporate tax, and customs, and how to avoid them. See VAT guide, e-invoicing, excise tax, and customs duties.

Overview

ZATCA can impose penalties for non-compliance with VAT, excise, corporate tax, and customs rules. Penalties include late registration, late filing, late payment, under-declaration, failure to issue or integrate e-invoices, and customs offences. Penalty amounts are set in the respective laws and regulations and can be a percentage of tax due or fixed SAR amounts. Interest may accrue on unpaid tax. See VAT, e-invoicing, and corporate compliance checklist.

ZATCA Role

ZATCA is the single authority for zakat, tax (VAT, excise, corporate income tax, withholding tax), and customs. It conducts audits, issues assessments, and applies penalties under the relevant laws. Taxpayers can object and appeal within the prescribed deadlines. Ensure you respond to ZATCA correspondence and maintain records. See withholding tax, accounting software, and transfer pricing.

VAT Penalties

VAT penalties can apply for: late registration (after the threshold is met); late submission of returns; late payment of VAT; incorrect returns or under-declaration; and failure to issue or integrate e-invoices (Fatoorah). Penalties are set in the VAT Law and Implementing Regulations — check current amounts (e.g. SAR 5,000 for first late return, higher for repeat or serious breaches). See VAT guide and e-invoicing.

Excise and Corporate Tax Penalties

Excise tax non-compliance (late registration, late payment, incorrect declaration) attracts penalties under the Excise Law. Corporate income tax (CIT) penalties apply for late filing, late payment, and under-reporting under the Income Tax Law. Withholding tax failures can also be penalised. See excise tax and withholding tax. Keep records and file on time to avoid penalties.

Customs Penalties

Customs violations (incorrect declaration, undervaluation, prohibited goods, smuggling) can result in fines, seizure, and criminal liability. Penalties are in the Customs Law. Use correct classification and value; comply with customs procedures. See customs duties and logistics license for brokers.

E-Invoicing and Compliance

ZATCA requires e-invoicing (Fatoorah) for B2B supplies. Phase 2 (integration with ZATCA) applies to specified taxpayers. Failure to issue e-invoices or to integrate can result in penalties. Ensure your systems are compliant. See e-invoicing and accounting software. General compliance (record-keeping, audits) reduces the risk of penalties. See MISA compliance.

Avoiding Penalties Checklist

Register for VAT, excise, and (if applicable) CIT when required. See VAT and excise.
File returns and pay tax on time; keep accurate records. See accounting software.
Implement e-invoicing (Fatoorah) for B2B. See e-invoicing.
Declare customs correctly; comply with customs procedures. See customs.
Respond to ZATCA notices and object/appeal within deadlines. See corporate compliance checklist.

Frequently Asked Questions

Can we get a penalty waived?

ZATCA may have procedures for waiver or reduction in specific circumstances (e.g. first-time, force majeure). Object to the penalty within the legal deadline and provide supporting evidence. Professional advice is recommended. See VAT guide.

What if we missed the e-invoicing deadline?

Implement compliance as soon as possible and engage with ZATCA. Late compliance may still attract penalties; voluntary disclosure or cooperation can be relevant. See e-invoicing.

Do penalties apply to directors or only the company?

Tax and customs laws may allow penalties (and in serious cases criminal liability) against responsible persons. The company remains liable for tax and penalties. See corporate governance.

Is there a statute of limitations?

Tax and customs laws set time limits for ZATCA to assess and for taxpayers to object. Keep records for the required period. See the VAT Law, Income Tax Law, and Customs Law for the current limits.

What happens if we don’t pay a penalty?

Unpaid tax and penalties can be collected by ZATCA through enforcement measures (e.g. collection, liens). Interest may accrue. Resolve disputes through the objection and appeal process. See VAT guide.

Are there penalties for not issuing a tax invoice?

Yes. Failure to issue a tax invoice (or e-invoice where required) can result in penalties. B2B supplies must be on e-invoices that meet Fatoorah requirements. See e-invoicing.