Saudi VAT Payment Plans, Extensions and Guarantees

An instalment arrangement and a tax guarantee solve different problems. Article 60 permits an approved payment schedule where its conditions are met; Article 65 secures liabilities under specified rules. Neither automatically extends return filing, waives late-payment penalties or makes a pending request equivalent to approval.

Article 60 requires evidence of payment difficulty

Article 60(1), p. 62, allows ZATCA to permit payment of tax, penalties and fees by instalments where evidence shows inability to pay when due or hardship from paying in one amount. The power is discretionary; a taxpayer’s preferred cash forecast is not an effective arrangement.

Paragraph (2) requires an application with supporting documents identifying amounts due, relevant tax periods and reasons payment cannot be made by the prescribed dates. Distinguish an actual quantified liability from a general request for more time on unspecified future taxes.

Dariba recommendation: support the request with a reconciled balance and factual cash-flow explanation. This is practical preparation, not a claim that the article prescribes one universal spreadsheet or approves a particular applicant.

Implement the actual approved schedule

Paragraph (3) requires an acceptance/refusal notice within 20 days from receipt. Paragraph (4) requires an acceptance notice to specify each instalment’s amount/date and related tax periods; the taxpayer identifies the relevant periods with each payment, subject to Article 59(7)‘s allocation rule.

A pending application or bank transfer with an informal payment plan does not replace the notice. Do not treat the 20-day response provision as automatic acceptance if no response is received.

Dariba original illustration: an actual notice permits a SAR 120,000 balance in six equal instalments. Each is SAR 20,000. This calculation assumes that approval and does not establish eligibility, a standard six-month entitlement or the treatment of additional penalties.

Duration, cancellation and penalties require separate attention

Current paragraph (5) generally limits the approved arrangement’s final instalment dates to 12 months, while allowing the Board to extend beyond 12 months under controls issued by separate decision. Do not describe 12 months as an exceptionless maximum or assume the delegated extension applies to everyone.

Under paragraph (6), failure to pay two instalments, or public-revenue protection circumstances specified by the provision, can lead to cancellation and immediate payment of the remaining balance following notice. It does not require the taxpayer to wait for a third missed payment before taking action.

Paragraph (7) preserves liability for applicable late-payment penalties during the extension. A payment plan is not itself a penalty amnesty. Current relief initiatives, if relevant, require their own actual rules and period verified rather than inferred from Article 60.

Ordinary security requires a written notice and its conditions

Article 65(1), pp. 66–67, generally allows cash/bank security outside its separate dispute/import paragraphs. The notice specifies type, amount, term and submission deadline, gives at least 20 days from notice, and states a term not exceeding 12 months under this limb.

The security amount is based on estimated average quarterly output VAT, with twice that average for a non-resident not appointing a tax representative. ZATCA retains the stated discretion over minimum/maximum amounts and other calculation methods in appropriate cases.

Dariba original illustration: an estimated quarterly output-VAT average of SAR 50,000 gives SAR 100,000 under the stated twice-average non-resident basis, before any actual Authority determination or other applicable case. This is not the taxpayer’s unrestricted right to choose the guarantee amount.

Cash security, enforcement and renewal are distinct events

Article 65(1)(c) requires cash security in an account separate from the tax account. Providing security is not automatically payment/discharge of the tax liability.

Where formal VAT collection procedures have begun and liabilities remain unpaid, subparagraph (d) permits offset/enforcement up to the unpaid amount after notice. Subparagraph (e) allows replacement security after an amount is consumed. Subparagraph (f) permits retention/renewal for similar further periods after the term and return or relevant offset on request under its framework.

The initial 12-month term therefore does not establish an unconditional automatic refund on its anniversary. Reconcile the security, actual applied amounts, remaining liabilities and any renewal/release notice before recognizing a cash recovery.

Dispute security has a separate amount limit

Article 65(2) addresses a formal appeal/review where ZATCA has evidence or reason to suspect the disputed tax may not be paid. It permits a written cash/bank guarantee request up to the unpaid tax and penalties under the disputed decision.

Do not substitute this maximum with the ordinary quarterly-output calculation, or describe every objection as automatically requiring a guarantee of the same amount. Apply the actual paragraph, grounds and notice.

This article does not prescribe appeal filing deadlines or state that a guarantee itself suspends all collection. Those questions require the actual dispute framework and decision considered separately. Preserve the assessment, challenge and security notices together.

Temporary-import security is a different route

Article 65(3) permits customs cash/bank security for temporary admission corresponding to VAT that would arise on import. The actual customs procedure and discharge conditions matter.

The Imports and Exports guideline, second edition May 2026, section 5.2, pp. 23–24, explains suspension/temporary admission and possible security. It does not make a bank guarantee a permanent import exemption or an Article 44 return-accounting approval.

See the import-relief guide for these separate routes. Track goods released for circulation, re-exported or remaining under authorization against the actual security obligation.

Keep filing, payment and security controls separate

Article 74(1) requires VAT returns and payment by their prescribed dates even where those fall outside working days. An instalment application, guarantee or unresolved commercial dispute does not itself amend the filing deadline.

Article 78’s notice framework and the actual approved payment/security documents should drive the diary. Retain application receipt, complete supporting documents, approval/refusal, tax periods, instalment references, penalties and any cancellation, offset or release.

No official worked example is attributed for these particular calculations. Dariba’s examples are expressly assumed. A defensible cash-management decision explains what is approved, what remains due and what the security actually secures.