a. Penalty for failure to file:

A Penalty for failure to file is imposed in the case of failure to file the return and pay accordingly within the prescribed time. One penalty of the following two penalties whichever is higher shall be imposed:
     - equal to 1 percent of gross receipts and not to exceed 20.000 Saudi

  riyal.
     - to be calculated in accordance with the following:
         -  5 percent of the underpayment of tax if the delay is for up to 30 days

       after the due date;
         -  10 percent of the underpayment of tax if the delay is more than 30

       and no more than 90 days after the due date;
         -  20 percent of the underpayment of tax if the delay is more than 90

       and no more than 365 days after the due date;
         -  25 percent of the underpayment of tax if the delay is more than 365

       days after the due date.

b. Penalty for delay

In the case the taxpayer fails to make payment of tax within the prescribed time, additional penalty will be imposed at 1 percent for each 30 days of the delay on unpaid tax. This penalty will not be imposed if delay period is less than 30 days.

c. Evasion Penalty:

The evasion penalty is imposed in case of willful concealment of facts, misrepresentation or non-filing in order to evade taxes. It is 25 percent of additional taxes assessed.

d. Other Penalties:

In the case of refraining from paying tax payable, or of tax evasion or helping others evade taxes, other penalties may be applied. These penalties may include ceasing activity temporarily or permanently, stopping the person from leaving the country, or placing a levy and seizing the taxpayer’s movable and immovable property.