Article 78 of the Saudi Income Tax Law
المادة 78 من نظام ضريبة الدخل · الفصل الرابع عشر: الغرامات
The article gives the Department the right to prosecute a certified accountant in court if it is proved that he submitted or certified incorrect statements contrary to generally accepted accounting principles with intent to help the taxpayer evade.
Official text (Arabic)
This article has not been amended since the law was issued.
بما لا يتعارض مع نظام المحاسبين القانونيين ، للمصلحة الحق في ملاحقة أي محاسب قانوني قضائيا يثبت أنه قدم أو شهد على صحة بيانات غير صحيحة، وبما يشكل انتهاكا للمبادئ المحاسبية المتعارف عليها بقصد مساعدة المكلف على التهرب من كل أو جزء من الضريبة .
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 78 explained in plain English
Liability under the Income Tax Law is not limited to the taxpayer alone; this article deals with the certified accountant who takes part in preparing statements or certifying their validity.
When may prosecution take place? The Department has the right to prosecute a certified accountant in court if the following elements are all present:
- It is proved that he submitted or certified the validity of incorrect statements.
- This amounts to a violation of generally accepted accounting principles.
- It was done with intent to help the taxpayer evade all or part of the tax.
An unintentional error is not enough under the wording of the article, since it requires intent to help evade, and it also requires proof.
Relationship to the Certified Accountants Law: The article begins with the phrase "without conflicting with the Certified Accountants Law", meaning that this right is exercised without prejudice to the provisions of that law, which regulates the profession. The article itself does not set the penalty that follows from this prosecution.
The article is linked to Article 77, which imposes on the taxpayer a fine of 25% of the tax difference resulting from his or his certified accountant's providing untrue information or committing fraud with intent to evade. The taxpayer's liability for the fine stands, and alongside it the accountant himself may be prosecuted under this article. If you are an accountant or a taxpayer facing such a situation, it is advisable to consult a lawyer specializing in tax cases.
Practical example
A certified accountant in Riyadh certified the validity of a company's return although he knew that revenues were shown at less than their true amount in violation of accounting principles, in order to help the company pay less tax. If this is proved, the Department may prosecute him in court, in addition to the fine imposed on the company under Article 77.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 78 of the Saudi Income Tax Law
Is a certified accountant held accountable for errors in the tax return?
The Department may prosecute him in court if it is proved that he submitted or certified the validity of incorrect statements that violate generally accepted accounting principles with intent to help the taxpayer evade.
Is an unintentional error enough to prosecute the accountant?
The article requires that it be done with intent to help the taxpayer evade all or part of the tax.
How does this article relate to the Certified Accountants Law?
The Department exercises the right of prosecution without conflicting with the Certified Accountants Law.
More articles on Income Tax Penalties
- Article 56
The article makes the Authority responsible for administering, examining, assessing and collecting income tax and imposing its penalties, with a penalty imposed by decision of the Governor or whoever the Authority's board delegates.
أ - الهيئة هي الجهة المسؤولة عن أعمال الإدارة والفحص والربط والتحصيل لضريبة الدخل، وإيقاع العقوبات المنصوص عليها في هذا النظام. ب - يكون إيقاع العقوبة بقرار من
- Article 57
The article requires every person subject to income tax to register his activity before the end of his first fiscal year, excepts those subject only to final withholding, and imposes a fine of SAR 1,000 to 10,000.
أ - يجب على كل شخص خاضع للضريبة بموجب هذا النظام أن يقوم بتسجيل نشاطه لدى المصلحة قبل نهاية سنته المالية الأولى . ب - لا تنطبق أحكام هذه المادة على المكلفين الخ
- Article 76
The article imposes a fine of 1% of gross revenue, capped at SAR 20,000, for breaching the return provisions, and for late filing a fine of 5% to 25% of the unpaid tax where that is higher.
أ - تفرض غرامة على المكلف الذي لا يتقيد بأحكام الفقرات ( أ ، ب ، د ، و) من المادة الستين من هذا النظام مقدارها واحد بالمائة (1%) من إجمالي إيراداته على ألا تتجا
- Article 77
The article imposes a delay fine of 1% of the unpaid tax for each thirty days, and a fine of 25% of the tax difference where untrue information is provided or fraud is committed with intent to evade.
أ - إضافة إلى الغرامات الواردة في المادة السادسة والسبعين من هذا النظام وفي الفقرة (ب) من هذه المادة ، على المكلف تسديد غرامة تأخير بواقع واحد بالمائة (1%) من ا
- Article 79
The article sets out the Minister of Finance's powers to issue the Regulations and instructions, amend depreciation groups and rates, waive tax debt and fines where collection is impossible, and award bonuses to outstanding employees.
للوزير الصلاحيات الآتية : أ - إصدار اللائحة التنفيذية لهذا النظام. ب - إصدار التعليمات واتخاذ الإجراءات التي يراها ضرورية لوضع هذا النظام موضع التنفيذ . ج - تعد
- Article 80
The article provides that the Income Tax Law is to be published in the Official Gazette and take effect ninety days after the date of its publication.
أ - ينشر هذا النظام في الجريدة الرسمية ويعمل به بعد تسعين يوما من تاريخ نشره.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.