The April 2025 amendments to the VAT Implementing Regulations introduced a provision that changes the landscape of ZATCA’s post-limitation examination powers. A new clause was added to Article 64 that allows ZATCA \u2014 with the taxpayer’s consent \u2014 to examine and assess any tax return after the standard five-year limitation period has expired. This is a significant development that businesses and advisers need to understand clearly: what it means, why it matters, and when consent should or should not be given.<\/p>\n\n\n
The April 2025 amendment (ZATCA Board Resolution No. 01-06-24, published 18 April 2025) added a new tenth clause to Article 64:<\/p>\n\n
As an exception to what is stated in Clause (3) of this Article, ZATCA may, after the expiry of the prescribed period, conduct an examination and evaluation of any tax return, provided that the taxable person agrees to this.<\/strong><\/p>\n <\/div>\n\n Clause (3) is the standard five-year limitation. Article 64(10) creates an express exception: after the five years have passed, ZATCA may still examine \u2014 but only with the taxable person’s agreement. Without that agreement, the five-year bar stands.<\/p>\n\n This is a voluntary mechanism on both sides. ZATCA cannot compel a taxpayer to consent to a post-limitation examination. And a taxpayer cannot initiate a post-limitation examination without ZATCA agreeing to conduct it. Both parties must agree for the process to proceed.<\/p>\n<\/div>\n\n\n The commercial rationale for a consent-based post-limitation examination is straightforward: there are situations where both ZATCA and the taxable person may benefit from examining a period that would otherwise be closed.<\/p>\n\n A business conducts an internal VAT health check in 2026 and discovers it significantly overpaid VAT in 2019 \u2014 a period now outside the five-year window. Under the old framework, no mechanism existed for recovering that overpayment once the window closed. Under Article 64(10), the taxpayer may consent to a ZATCA examination of the 2019 period, which \u2014 if it confirms the overpayment \u2014 could result in a refund or credit.<\/p>\n <\/div>\n\n ZATCA receives information in 2026 \u2014 from a third-party data source, a related-party audit, or an industry-wide compliance programme \u2014 that suggests a specific taxpayer may have underdeclared VAT in 2020. The standard five-year window has passed for periods falling in 2020 (expiring at end of 2025). Rather than pursuing the twenty-year extended window (which requires demonstrating intentional breach), ZATCA may approach the taxpayer and seek consent to examine the 2020 periods. If the taxpayer agrees, ZATCA can assess and the taxpayer can respond. If the taxpayer refuses, ZATCA cannot examine under this provision \u2014 though it may still seek to establish grounds for the twenty-year window.<\/p>\n <\/div>\n<\/div>\n\n\n The consent decision is one of the most commercially consequential tax choices a business can face in post-limitation circumstances. It should never be given without a prior review of the period in question and qualified tax advice.<\/p>\n\n The provision does not specify whether consent can be withdrawn once examination has commenced. The prudent assumption is that once ZATCA has begun the examination process with the taxpayer’s agreement, the taxpayer cannot unilaterally end it. The consent decision must be made carefully before examination begins \u2014 not reconsidered mid-process.<\/p>\n <\/div>\n<\/div>\n\n\n Article 64(10) must be read alongside the new Article 69(7) added by the same April 2025 amendment. Article 69(7) provides that ZATCA may examine any tax period for which a refund claim has been submitted, within one calendar year from the date the claim was filed \u2014 without prejudice to the standard five-year and twenty-year assessment windows.<\/p>\n\n Together, these two provisions reshape the post-limitation examination landscape:<\/p>\n\n The April 2025 amendments to the VAT Implementing Regulations introduced a provision that changes the landscape of ZATCA’s post-limitation examination powers. A new clause was added to Article 64 that allows ZATCA \u2014 with the taxpayer’s consent \u2014 to examine and assess any tax return after the standard five-year limitation period has expired. This is […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-228","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=228"}],"version-history":[{"count":0,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/228\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why This Provision Was Introduced<\/h2>\n <\/div>\n\n
The Consent Decision: When to Agree and When Not To<\/h2>\n <\/div>\n\n
Considerations That Support Giving Consent<\/h3>\n\n
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Considerations That Counsel Against Giving Consent<\/h3>\n\n
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Interaction With the New Refund-Linked Audit Window<\/h2>\n <\/div>\n\n
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