An examination is not an accusation. It is a statutory right ZATCA exercises over returns generally — the Regulation even allows it at your premises, at ZATCA’s, or anywhere it designates. But the outcome of an examination is not decided during it. It is decided before it: by what you kept, what you can prove, and how fast you answer within the statutory window.
This guide brings together what the Implementing Regulation for Zakat Collection (1445H) and the Income Tax Law say about examination and assessment, and turns it into a practical readiness checklist — with the article number for each rule.
First: what ZATCA is entitled to do
- Examine anywhere: ZATCA may examine the zakat return at the payer’s premises, its own premises or any other place it designates, may delegate its staff or agents to attend your premises, and the examination is documented (Article 105 of the Zakat Regulation). For tax: examine books and records in the field during working hours (Article 61(b) of the Income Tax Law).
- Obtain your data from others: ZATCA may obtain data or documents held by any third party without referring to you, including direct access (Article 110/3 of the Zakat Regulation), and all persons and government bodies must supply it with tax-related information (Article 61(a)). In other words, ZATCA compares your return with your VAT returns, GOSI data, customs data, point-of-sale data and the Etimad platform before it asks you anything.
- Assess and reassess: ZATCA may amend an assessment with reasons, or resort to a presumptive assessment (Article 112); for tax, it may issue an additional assessment where tax previously accepted proves incorrect, notifying you of the grounds (Article 62(c)).
- Recharacterise: for tax, ZATCA may disregard any transaction with no tax effect, recharacterise transactions whose form does not reflect their substance, and reallocate income and expenses between related parties (Article 63).
Second: the examination window — five years, ten, or none
As a rule, ZATCA may assess, reassess and correct errors within five years of the filing deadline (Article 106/1 of the Zakat Regulation; Article 65(a) of the Income Tax Law). It extends to ten years for zakat where the return was filed late or incomplete, the amount due was not paid on time, or a presumptive assessment was made (Article 106/2); and for tax where no return was filed or the return was incomplete or incorrect with intent to evade (Article 65(b)). For zakat there is no time limit where incorrect information was submitted with intent to evade, where the payer never registered, or where the payer consents (Article 106/3).
Hence the first readiness rule: the examination file is not a one-year file but a ten-year one. Article 110 requires you to keep the documents behind the return inside the Kingdom for at least ten years, and ZATCA may request data to verify them throughout that period.
Third: when the document request arrives — your rights and your duties
Article 99 of the Zakat Regulation sets safeguards around a request for documents:
- ZATCA must state the reason for requesting the document, and the request must be confined to that purpose.
- It must allow a reasonable period of no less than ten working days.
- It must accept all official documents issued by competent government bodies, and it bears the burden of proving them incorrect.
- These safeguards fall away where it is established that incorrect documents or information were submitted with intent to evade.
Your duties are equally clear: documents and explanations are submitted in Arabic and by a person with standing (Article 99/1–2), and ZATCA must be enabled to access them during examination (Article 98/3). For tax, the commercial books and accounting records needed to determine the tax precisely must be kept in Arabic (Article 58(a)) — and ZATCA may disallow any expense for which you cannot, without reasonable cause, produce the supporting document (Article 58(b)).
The second rule: the burden of proof is on you, not on ZATCA. Article 111 places on the accounts-based payer the burden of proving the return correct; where it cannot, ZATCA may disallow the item or assess by presumption. A presumption is applied only after a warning and the passage of at least sixty days (Article 115) — the final window that many lose by ignoring the letter.
Fourth: the readiness checklist — what you build before it is asked for
A good examination file is built when the return is prepared, not when the request arrives. These are its elements as the provisions above require them, in the order ZATCA usually starts:
- Financial statements, trial balance and general ledger for the year under examination, classified under SOCPA standards — ZATCA may adjust your figures where their classification or presentation departs from those standards (Article 9 of the Zakat Regulation).
- Revenue reconciliation: revenue per the financial statements against the sum of the year’s VAT returns, with every difference explained (timing, exempt sales, non-taxable income). This is the first comparison ZATCA runs, because it already holds the data.
- Payroll reconciled to GOSI, and purchases and imports reconciled to VAT and customs data — the very benchmarks the Regulation uses to estimate sales in a presumptive assessment (Article 89).
- Liabilities and partner loans file: loan agreements, movements during the year and their effect on the base — among the additions to the base that draw the most queries.
- Provisions and bad debts: the basis of each provision and the conditions for a bad debt to be deductible.
- Withholding tax file: every payment to a non-resident with its contract, characterisation, withholding certificate and remittance date — ZATCA sees it in your bank transfers before it sees it in your return.
- Related parties: a list of them, their transactions and pricing; ZATCA may reallocate income and expenses between them (Article 63(c) of the Income Tax Law).
- Return and correspondence log: a copy of what was actually filed, filing and payment dates, and every communication with ZATCA with its date of receipt — because response and objection periods run from notification.
Fifth: after the examination — the assessment and the sixty-day window
Your assessment notice must state the basis and reason for the assessment, the amount due, the payment date and your right to object (Article 113 of the Zakat Regulation). For tax, notice is given by registered official letter or any means proving receipt (Article 62(b)).
Then the sixty-day clock starts: the assessment becomes final and payable on your acceptance or after sixty days from its date without objection (Article 117/1 of the Zakat Regulation; Article 66(a) of the Income Tax Law). For an objection to be admissible, the undisputed items must be paid, together with between 10% and 25% of the disputed zakat amounts or a guarantee (Article 116); for tax, the undisputed amount must be paid or an instalment plan approved (Article 66(b)).
Because penalties differ fundamentally between zakat and tax, keep the distinction in mind when reading an assessment: the Zakat Regulation contains no percentage penalty for delay, whereas the Income Tax Law imposes a non-filing penalty of 1% of gross revenue capped at SAR 20,000, or 5% to 25% of unpaid tax depending on the length of the delay (Article 76), plus 1% for every thirty days of late payment (Article 77(a)).
Can ZATCA examine my books at my premises?
Yes. Article 105 of the Zakat Regulation allows examination of the return at the payer’s premises, ZATCA’s premises or any place it designates, and Article 61(b) of the Income Tax Law allows field examination of books and records during working hours.
How long do I have to answer a document request from ZATCA?
No less than ten working days, and ZATCA must state the reason for the request and confine it to that purpose (Article 99 of the Zakat Regulation), unless it is established that incorrect information was submitted with intent to evade.
How many years back can ZATCA examine?
Five years from the filing deadline as a rule; ten years where the zakat return was late, incomplete or unpaid, or where no tax return was filed or evasion is involved; and without limit for zakat where evasion or non-registration is established (Article 106 of the Zakat Regulation and Article 65 of the Income Tax Law).
What happens if I cannot substantiate an item in the return?
The burden of proving the return rests on the accounts-based payer; where it cannot, ZATCA may disallow the item or assess by presumption (Article 111), and for tax it may disallow any expense without a supporting document (Article 58(b)).
What is the statutory period for objecting to an assessment?
Sixty days from the date of the assessment or receipt of its letter, after which it becomes final and payable (Article 117 of the Zakat Regulation and Article 66 of the Income Tax Law).
Can ZATCA obtain my data from other bodies?
Yes. ZATCA may obtain data and documents held by any third party without referring to the payer (Article 110/3 of the Zakat Regulation), and all persons and government bodies must supply it with tax-related information (Article 61(a)).
How we help
At Al-Mousa & Al-Tamimi Certified Public Accountants we build the examination file with every return we prepare, not after ZATCA’s request arrives: revenue, payroll and purchase reconciliations against VAT, GOSI and customs data; the partner-loan, provisions and withholding files; documents arranged in Arabic and from a person with standing. During an examination we represent you and answer within the ten-day window, then study the assessment and object within the sixty days where that is warranted.
See our zakat and tax service · Read next: objecting to a ZATCA assessment, step by step · The zakat return: deadline and documents · Contact us
Sources: Implementing Regulation for Zakat Collection (1445H) — Umm Al-Qura official gazette; Income Tax Law — Saudi Laws Portal. This article is general guidance and is not a substitute for advice on a specific case.
