What is Tax Audit Procedure?
A tax audit procedure is the formal process through which ZATCA examines a taxpayer’s records to verify the accuracy of declared taxes — corporate income tax, VAT, withholding tax, excise tax, or zakat — and to assess any additional liability or penalty.
How It Works
- Receive an official audit notification from ZATCA with scope and period.
- Prepare the requested documents — books, invoices, contracts, customs files.
- Hold the opening meeting and clarify the audit plan.
- Respond to information requests and queries within the stipulated deadlines.
- Review the draft assessment, file objections if needed, and settle or appeal the final assessment.
Saudi Context
ZATCA conducts both desk audits and field audits. The taxpayer has the right to object to the assessment within 60 days and to escalate the case to the General Secretariat of Tax Committees if the objection is not resolved.
Example
A trading company receives a VAT audit notice covering the previous 12 months. After two months of fieldwork, ZATCA assesses an additional SAR 220,000 of VAT due on disallowed input credits. The company objects within the 60-day window with supporting invoices.