Saudi VAT Examinations After Five Years: Taxpayer Agreement

Article 64(10) permits ZATCA, with the taxable person’s agreement, to examine and assess a return after the ordinary assessment period in paragraph (3). That power deserves careful consideration. It does not expressly revive every expired input deduction, return correction or refund request right, and it does not prescribe an irrevocable consent procedure. Decisions should be based on the particular periods, evidence, potential adjustments and other applicable powers.

What paragraph (10) actually provides

The current Arabic VAT Implementing Regulations, Article 64(10), p. 66, make an exception to paragraph (3): after its prescribed period, ZATCA may examine and assess any tax return subject to the taxable person’s agreement. The provision is reproduced here in substance, rather than presented as an official English translation.

Paragraph (3) ordinarily prevents issuing or amending assessments after five years from the end of the calendar year containing the tax period. Agreement under paragraph (10) supplies a distinct route after that ordinary period. It is a power ZATCA may exercise with agreement, rather than a taxpayer’s unilateral entitlement to demand a particular reassessment result.

The reviewed Arabic edition identifies the addition by reference to Board Resolution 01-06-24 dated 19 November 2024. The April 2025 consolidated edition is not, by itself, proof that every issue concerning commencement or earlier transactions has the same answer. Where the timing of the amendment matters to a dispute, verify the applicable publication, commencement provisions and facts.

Calculate whether the ordinary period has ended

Dariba illustration: a Q1 2020 return falls in calendar year 2020. Its ordinary five-year calculation runs from the end of 2020 to 31 December 2025. A proposed examination/assessment under paragraph (10) in October 2026 therefore concerns a period beyond that ordinary endpoint. A Q1 2022 period ordinarily reaches 31 December 2027 and has not reached that endpoint at the same review date.

The relevant calculation does not start on the return filing date. But before deciding that consent is essential to every proposed action, check the legal basis ZATCA relies on and whether another provision applies.

Article 64(4) contains the specified twenty-year assessment cases involving intentional breach or registration noncompliance. Paragraph (10)‘s agreement condition is not a taxpayer veto over a properly applicable paragraph (4) power. The assessment-period guide explains those distinct conditions.

Separate agreement from ordinary cooperation

Article 64(6) requires cooperation with examinations. Paragraph (10), however, expressly adds agreement for its particular post-paragraph-(3)-period route. Do not assume that answering a routine query necessarily settles whether the taxpayer agreed to examination and assessment of every older return.

Dariba recommendation: establish the periods, returns, legal basis, proposed scope and person authorised to agree, and retain a clear written record. This reduces later uncertainty. The paragraph itself does not prescribe a particular consent form, a mandatory board resolution, a fixed additional number of years or a complete procedure for defining scope.

Nor does the provision promise that agreement on one issue necessarily prevents consideration of other relevant adjustments within the authorised examination. Any proposed limitation needs its actual legal and procedural effect established, rather than assumed from the taxpayer’s preferred description.

Consent does not establish a cash recovery right

An older period may contain overpaid output tax, an omitted input deduction, incorrect classification or several different errors. Those are not interchangeable claims. Article 64(10) addresses examination and assessment; other provisions impose their own conditions and time limits.

Paragraph (10) does not expressly say that agreement disapplies all the other deadlines. A favourable expected examination result is therefore not sufficient to book a refund receivable without identifying the legal route to that credit or payment. Seek clarification on an unresolved interaction rather than promising that consent cures an otherwise late claim.

An official correction example shows the boundary

ZATCA’s Amendments to the VAT Implementing Regulations, first issue April 2025, section 2.12, Example 26, p. 43, concerns Company B, a legal consultancy, discovering an overstatement in its Q4 2023 VAT return. It allows correction in a subsequent return subject to Article 63(4)‘s timeframe. The example supplies no amount, consent agreement or expired-period recovery outcome.

Dariba analysis: the example supports a qualifying correction within its own rule. It should not be extended into evidence that Article 64(10) overrides that rule after expiry. The official example’s express time qualification is part of the analysis, not a detail to remove when discussing a commercially attractive refund possibility.

Evaluate both potential directions of adjustment

Dariba illustration — original facts, not a ZATCA example: a review of an older period identifies a possible SAR 200,000 taxpayer-favourable adjustment and SAR 260,000 of potentially omitted output tax. The adverse item exceeds the favourable item by SAR 60,000 before considering eligibility, limitation, penalties or collection. This is a review of possible exposures, not a conclusion that all items can legally be netted, assessed or refunded.

The commercial review should identify complete transaction populations, original tax treatment, evidence quality, alternative positions and any separate powers that may already apply. An examination is not a guaranteed one-direction refund exercise.

Incomplete archives create an evidential problem, but paragraph (10) does not itself say that every missing record automatically produces a best-estimate assessment. Article 62(1)‘s missing-return estimate and Article 64’s assessment/evidence powers need their own conditions considered. Preserve relevant records and document limitations openly.

Do not invent an irrevocability rule

Paragraph (10) does not set out an express withdrawal procedure or say that agreement is automatically irrevocable once examination starts. It would be unsafe either to assert an unconditional right to withdraw at will or to publish irrevocability as settled law.

Dariba recommends resolving questions of authority, scope, duration and any proposed withdrawal before agreement is given, with advice on the actual terms and procedural position. If circumstances change, seek a documented resolution; do not assume that stopping cooperation terminates an examination or removes consequences of work already undertaken.

Refund-linked examination is another distinct provision

Article 69(7) permits examination of a tax period for which a refund request was submitted within one calendar year from submission, without prejudice to Article 64(3) and (4). It does not say that making a refund request automatically supplies consent under Article 64(10), or that all other assessment powers expire after one year.

Before responding to a request concerning an older period, identify the proposed act, its legal basis, the relevant periods and the interaction with any taxpayer claim. Preserve notification and correspondence dates and verify applicable objection requirements under Article 68. The refund guide and audit guide cover the surrounding procedures without turning unresolved consent questions into certain outcomes.