After a taxpayer files his returns, the payment process is initiated when a SADAD* invoice, containing the invoice number and the amount due, is automatically generated.
How to make a payment?
Once the SADAD invoice has been generated and sent to the taxpayer, the payment of Tax must be made to the designated bank account of the General Authority of Zakat and Tax (GAZT) through the SADAD payment gateway, either online or via the ATM. After the payment, the taxpayer will receive a payment receipt from GAZT. This will contain an attachment with the unique return reference number and the amount paid.
The taxpayer can make a payment up to the total amount due in the SADAD bill. The payment received by GAZT will be applied to outstanding balances in the following order:
- Liabilities of the tax period specified in the SADAD bill
- Penalties of the tax period specified in the SADAD bill
- Penalties from previous tax periods, starting from the oldest period
Please note the following:
GAZT may offset any VAT credit balance against any other taxes due by the Taxpayer, however GAZT shall notify the Taxpayer where an offset of a credit balance has been carried out.
If a taxpayer presents evidence showing that he is unable to pay the Tax when due, or showing that he would suffer hardship from a single payment, GAZT may allow payment in instalments of Tax and penalties, fines or charges payable.
The taxpayer would have to submit a request for paying the tax liability over a set number of months that do not exceed 12 months. The system will generate an instalment schedule simulation that would be sent to the filing officer for approval. Once approved, the instalment plan goes into effect.
For further information about instalment payments please refer to the regulations article sixty.
When to make a payment?
VAT payment should be made following the submission of the VAT return (unless a refund is due to the taxpayer). Payment of Tax due by a Taxpayer in respect of a Tax Period must be made maximum by the last day of the month following the end of that Tax Period.
For a monthly filer, the payment deadline for the reporting period of 1st January to 31st January would be 28th February.
For a quarterly filer, the payment deadline for the reporting period of 1st January to 31st March would be 30th April.
Late payments will incur penalties added to the taxpayer’s account on the unpaid amount.
What happens if a taxpayer misses payment?
When a taxpayer misses a payment, a notification will be sent on the first day following the deadline to inform the taxpayer of the penalties imposed on him. If the payment is not made promptly, a formal non-payment notice is then sent to the taxpayer. The formal non-payment notice is followed by regular reminders to taxpayers. After a further period, if no response has been received, a collection case may be opened to collect dues via other means, which may include commercial sanctions or legal procedures.
Carry-forward and refunds
In the case that the return of the taxpayer results in a credit, the taxpayer has the option of requesting that credit to be carried forward to the subsequent period or requesting a refund.
Before a credit is carried forward or refunded, GAZT will validate the credit, and only after validating it, that it made available to the taxpayer to carry-forward or refund.
*SADAD Payment System (SADAD) is the national Electronic Bill Presentment and Payment (EBPP) service provider for the Kingdom of Saudi Arabia (KSA).