ZATCA disputes objections appeals are among the statutory procedures that allow taxpayers in the Kingdom of Saudi Arabia to object to zakat, tax, and customs decisions and assessments and to request their review in accordance with the applicable laws and regulations.
Understanding the stages of objection and appeal and the time limits specified for each procedure helps protect the rights of establishments and individuals and prevents them from losing their right to challenge due to failure to comply with procedural requirements.
Handling these disputes requires a precise understanding of the nature of the decision being challenged, the statutory grounds that can be relied upon, and the supporting documents, in addition to complying with the specified deadlines for submitting an objection or appeal.
In this article, we review the most prominent aspects related to ZATCA disputes objections appeals, along with the most important tips for dealing with them efficiently.
ZATCA disputes objections appeals
ZATCA disputes objections appeals include the differences that arise between the Authority and taxpayers regarding decisions related to zakat, taxes, or customs duties, such as disagreement over the results of an audit, the zakat base, the tax due, or the fines and violations imposed.
A dispute may arise as a result of differing views on the interpretation of statutory texts, the method of calculating financial obligations, the sufficiency of the documents submitted, or the validity of the procedures taken by the Authority.
Saudi laws provide specific tracks for requesting review of and objecting to decisions, leading to the stages of resolving the dispute in accordance with the prescribed jurisdictions.
It is important to distinguish between an objection, which is submitted against a decision in accordance with the specified procedures, and an appeal, which is filed to challenge a decision issued by the competent adjudicating body, as the requirements of each stage and the body that hears it differ.
What Is Meant by ZATCA Disputes?
ZATCA disputes are the statutory differences that arise between the Authority and taxpayers as a result of decisions or procedures related to the application of zakat, tax, and customs laws.
These disputes may relate to determining financial obligations, interpreting statutory provisions, imposing fines, or assessing the value of goods and the duties due.
Disputes cover a number of areas, most notably:
- Zakat disputes: Differences related to the zakat base, addition and deduction elements, or the amount of zakat due.
- Tax disputes: Objections related to value-added tax, income tax, and other taxes within the Authority’s jurisdiction.
- Customs disputes: Differences related to the customs classification of goods, the customs value, or customs duties, fines, and procedures.
- Fine disputes: Objections to fines imposed due to delay in submitting returns or payment, or other violations in accordance with the relevant laws.
The details of each dispute differ according to the type of obligation and the decision issued, so the decision and related documents should be studied before choosing the appropriate procedure.
Reasons for Objecting to ZATCA Decisions
An objection may arise when the taxpayer believes that the decision does not correctly reflect their zakat, tax, or customs obligations. The most prominent reasons include:
- Errors in calculating obligations: Errors in calculating the zakat base, taxes, or customs duties.
- Differing interpretation of laws: A difference in the interpretation of statutory texts or the extent of their applicability to a particular transaction or activity.
- Failure to account for exemptions or deductions: Failure to apply an exemption or deduction to which the taxpayer is entitled under the relevant laws and regulations.
- Objection to fines and violations: Objection to a zakat, tax, or customs fine or violation in accordance with the nature and circumstances of the case.
- Discrepancies in data and documents: A discrepancy between the Authority’s data and the records, invoices, or contracts, which can be clarified by submitting supporting documents.
Procedures for Objecting to ZATCA Decisions
The objection procedures begin with reviewing the Authority’s decision and identifying the reasons for the disagreement, then preparing an objection supported by documents and statutory grounds and submitting it through the approved channels within the specified period.
- Reviewing the decision: Identifying the reasons for the decision, the period and amounts in dispute, and the deadline specified for objection.
- Analyzing the grounds for objection: Reviewing the accounts, returns, and records to identify the points of difference and errors.
- Preparing the objection memorandum: Clarifying the decision, the grounds for objection, the requests, and the statutory and accounting grounds.
- Attaching documents: Submitting invoices, contracts, returns, financial statements, and other supporting documents.
- Submitting and following up on the objection: Filing the objection through the approved channels and following up on the request, responses, and any required data.
The deadlines and requirements differ according to the type of decision and dispute, so the applicable deadline and rules must be verified for each case.
Appealing Decisions Resolving Zakat, Tax, and Customs Disputes
An appeal is a stage subsequent to the objection and is used to challenge a decision issued by the competent adjudicating body when one of the parties to the dispute believes that there are statutory or substantive grounds warranting reconsideration.
This stage is subject to specific jurisdictions, procedures, and deadlines, and may differ depending on the type of dispute and the decision issued.
The appeal process requires preparing a memorandum that sets out the grounds for objecting to the adjudication decision, explains the reasons for the challenge and the requests, and attaches the necessary documents and evidence.
It is important that the grounds for appeal are related to what the decision addressed, such as an error in applying a statutory text, a failure to address defenses, or a failure to properly assess the relevant evidence.
Submitting an appeal does not necessarily mean that the request will be accepted or the decision changed, as the competent body examines its grounds and documents in accordance with the applicable procedural and substantive rules.
The Role of Adjudication and Appeal Committees in Disputes
The adjudication committees are competent to hear cases filed in accordance with the statutory procedures regarding zakat, tax, and customs decisions within their jurisdiction, after the prerequisites for filing a case have been met.
This stage allows the taxpayer’s defenses and documents to be presented before a competent adjudicating body independent of the Authority.
As for the appeal committees, they hear objections submitted against the decisions of the adjudication committees in accordance with the rules governing appeals.
The appeal is based on specific grounds related to the decision being challenged, with the submission of supporting documents and statutory defenses.
The taxpayer can follow up on the case procedures and submit documents and requests through the electronic channels approved by the General Secretariat of the Zakat, Tax and Customs Committees, taking into account the instructions for each stage.
Documents Required to Support an Objection and Appeal
The required documents depend on the nature of the decision and the subject of the dispute, but preparing a complete file helps clarify the facts and link them to the statutory grounds.
Documents that may be relevant include:
- The decision being objected to: A copy of the Authority’s decision or the reassessment or violation notice.
- Relevant returns: Zakat or tax returns for the periods in dispute.
- Accounting records: Financial statements, ledgers, account statements, and accounting adjustments.
- Commercial documents: Contracts, invoices, purchase orders, and proof of payment.
- Customs documents: Customs declarations, commercial invoices, certificates of origin, and shipping documents, where the dispute relates to import or export.
- Correspondence and notices: Correspondence exchanged with the Authority and any previous requests or responses related to the matter.
- The memorandum of grounds and requests: A document explaining the grounds for the objection or appeal and clearly specifying the requests.
It is preferable to arrange the documents according to each point of dispute, clarify the relevance of each document to the request, and ensure the completeness of the data and the accuracy of the figures and dates.
Tips for Reducing the Risks of Zakat and Tax Disputes
Establishments can reduce errors that may lead to disputes by following clear organizational and accounting practices, the most important of which are:
- Reviewing zakat and tax returns before submitting them and verifying their consistency with the financial records.
- Retaining invoices, contracts, and documents supporting transactions in accordance with statutory requirements.
- Following up on notices and decisions issued by the Authority and not delaying their review.
- Documenting correspondence and procedures related to audit, assessment, and objection.
- Reviewing the accounting and tax treatments of unusual transactions or those with a significant financial impact.
- Seeking specialized advice when there is a substantive disagreement or ambiguity in the application of a statutory provision.
Adhering to these practices helps improve the establishment’s readiness to deal with any review or objection and enhances its ability to present a clear position supported by evidence when needed.
ZATCA disputes objections appeals from CLA
CLA provides specialized services in managing zakat and tax disputes, including studying cases, preparing objection files, representing clients before the competent authorities, and supporting negotiation and appeal procedures.
These services aim to help establishments handle disputes in accordance with the applicable laws and procedures and protect their rights at various stages of the dispute.
Frequently Asked Questions About ZATCA disputes objections appeals
What is the specified period for objecting to the Authority’s decisions?
The period differs according to the type of decision and the applicable law, and may be 60 days in some cases, so the decision and regulations should be reviewed to verify the deadline.
How can an objection to the Authority’s decision be submitted?
The objection is submitted electronically through the Authority’s portal, with its grounds stated and the required documents attached, according to the type of decision.
What happens if the objection is rejected?
The taxpayer may have the right to challenge the decision before the competent adjudication committee within the statutory deadline, in accordance with the approved conditions and procedures.
Can the dispute be settled with the Authority?
Yes, a settlement request can be submitted in accordance with the approved controls, and acceptance of the request depends on the nature of the dispute and the settlement conditions.
What is the difference between an objection and an appeal?
An objection is made against a decision issued by the Authority, while an appeal is made to challenge a decision of the adjudication committee before the competent appeal committee.
Finally, we have reached the end of the article, in which we reviewed ZATCA disputes objections appeals. You can contact us at CLA to obtain our services.
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