A penalty shall be imposed for failure to file the return in the following cases:

1. Failure to file the return within 120 days from the end of the fiscal year.

2. Failure to file the return using the legally prescribed return form, even if the return is submitted within the statutory deadline.

3. Failure to pay payable tax as per the return, even if the return is submitted within the statutory deadline and using the approved form.

4. Failure to notify the Department of cessation of activity and to file the return and pay tax accordingly within 60 days of cessation.

5. Failure to file the information return by a partnership within 60 days from the end of its fiscal year.

In case of failure to file the return by the specified deadline, the higher of the following two penalties shall apply:

1. 1% of the total revenues, with a maximum of 20.000 Saudi riyals.

2. According to the following rates:

   • 5% of the unpaid tax if the delay does not exceed 30 days after the due date;

   • 10% of the unpaid tax if the delay is more than 30 days but does not exceed 90 days after the due date;

   • 20% of the unpaid tax if the delay is more than 90 days but does not exceed 365 days after the due date;

   • 25% of the unpaid tax if the delay is more than 365 days after the due date.

"Unpaid tax' means the difference between the amount paid by the taxpayer within the statutory deadline and tax due under the provisions of the Income Tax Law.

This includes any adjustments made by the Authority which have become final in accordance with Article 71(2) of these Regulations.

This also applies to contested cases, where the penalty is calculated from the legally prescribed date for filing and payment.