1) Filing late
The return and payment are due on the last day of the month after the period ends — e.g. Q1 (Jan–Mar) is due 30 April. Late filing costs 5% to 25% of the tax due.
2) Paying late
Filing without paying doesn't protect you. Late payment costs 5% of the unpaid tax for each month or part of a month — two months late means 10% on top.
3) Registering late
Crossing the SAR 375,000 mandatory threshold without registering on time carries a SAR 10,000 penalty.
4) Incorrect returns — the most dangerous
An error that results in underpaid tax can be penalised at up to 50% of the difference. Common causes: claiming input VAT on invalid purchase invoices, or unrecorded sales.
How to avoid them
- A clear deadline calendar with reminders at least two weeks ahead
- Monthly reconciliation of sales and purchases with the bank
- Never claim VAT on an invoice with missing details
- A second review before every filing
Key takeaways
- Due: last day of the month after the period
- Late filing 5–25%; late payment 5% per month
- Incorrect returns: up to 50% of the difference
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