Can Taxpayers object to GAZT in Saudi Arabia?
Can Taxpayers object to GAZT in Saudi Arabia: A taxpayer has the right to object to an assessment or reassessment made by the Department within the legally prescribed period of 60 days of receipt of the assessment or reassessment letter.
The objection must be in a memorandum stating reasons for objection and be addressed to the notifying Department. If the end of the objection period falls within an official holiday, the objection shall be accepted if filed during the first working day immediately after such a holiday.
The Department shall consider the objection. If reasons and documents presented are satisfying, the Department may accept the objection, in full or in part, and notify the taxpayer of the reassessment accordingly. If dispute continues between the Department and the taxpayer, the Department shall refer the objection to the Preliminary Committee.
The objection is not considered accepted in form unless the taxpayer has paid due amounts for undisputed items or unless an agreement has been made to make payment in installments. Making payment, and requesting installment arrangement and obtaining approval on it, should be done within the legally prescribed period for objection.
Filing of Appeal against Decision
The Department and the taxpayer may appeal to the Appeal Committee the Preliminary Committee resolution within 60 days of notice of such resolution. If the end of the appeal period falls within an official holiday, the appeal shall be accepted if filed during the first working day immediately after such a holiday. Both parties may also appeal the resolution by the Appeal Committee to the Board of Grievances within 60 days of notice of such resolution.
Preliminary Committees shall be formed for settlement of tax disputes between the Department and taxpayers. Each Preliminary Committee shall consist of a chairman and at least three members specialized in accounting, law and taxation; one member shall be from the Department. The grades of members will not be less than grade 10 or equivalent grade in accordance with Civil Service Regulations.
A Preliminary Committee shall be changed every four years provided that one member or more is (are) retained for one more term or longer.
Formation of Committee
The Committee’s Chairman shall inform the Department and the taxpayer of the date of the Committee’s hearing session where the two parties can present their positions, reasons and documents; a copy of the Department’s memorandum presented to the Committee on the taxpayer’s objection shall be attached with the notice to the taxpayer. If the objecting taxpayer is a foreign entity with no representative in the Kingdom, the taxpayer shall be informed of the date of the session at least 90 days before that date through the Kingdom’s Ministry of Foreign Affairs.
If either party or both parties fail to attend the session, the Preliminary Committee may issue its resolution based on circumstances and documents presented to it. The session could be postponed for compelling reasons satisfying to the Committee but no more than twice.
Presence of majority of the Preliminary Committee members, including the Chairman or Deputy, is required to convene a session.
Before examining the substance of the objection, the Committee shall examine the objection if proper formalities are met: submission of the objection during the legally prescribed time, proper legal representation by the two parties, and payment of due amounts by the taxpayer on agreed upon items.
The Preliminary Committee issues its resolution by majority after hearing the two parties and considering their reasons. If the vote is in tie, the Chairman’s vote shall win.
The tax payable per the resolution should be neither less than the amount declared by the taxpayer/ representative nor more than the tax assessed by the Department.
The Committee shall inform the Department and the taxpayer of its resolution by a registered official letter or by other means that provide receipt of delivery. The Preliminary Committee resolution is final unless either party appeals it within 60 days of receipt.
The Department must implement the Preliminary Committee resolution, reassess accordingly and inform the taxpayer of the new reassessment, even if the resolution has been appealed.
If the taxpayer wants to appeal the Preliminary Committee resolution, the taxpayer has to comply with the following:
a) Payment of tax liability due to the Department as per the Preliminary Committee resolution, or submittal of a bank guarantee of the full payable amount, valid for at least one year, automatically renewable, cashable after the final resolution at the exclusive discretion of the Department and compatible with the format approved by the Saudi Arabian Monetary Agency. This is a condition to accept the appeal in form.
b) Submittal to the Appeal Committee of a memorandum stating grounds for appeal, any additional documents, payment receipt or a copy of the bank guarantee in order to register the appeal in the Appeal Committee’s record within the legally prescribed period.
c)The bank guarantee shall not be released nor cash payment refunded unless final resolution is issued on the dispute.