Tax Alert: Latest Changes to GSTC Working Rules

New working rules for the Zakat, Tax, and Customs Committees (GSTC) have been approved, through the Royal Order No. 25711 dated 23 October 2023. These rules are enforceable as of the order’s publication in the Official Gazette (Umm Al Qura) on 27 October 2023, replacing the previous rules under Royal Decree No. 26040.

• The working rules are presented in 11 sections, 51 articles and will be applied to Custom Committees, in addition to the Tax and Zakat Committees.
• The territorial jurisdiction restriction of the circuits has been removed, meaning that the relevant circuits may handle any lawsuit even if the litigants are registered in different cities, except for customs smuggling cases and the like that will be heard in the territorial jurisdiction where the crime was committed.
• The definition of a taxpayer includes a natural or legal person subject to Zakat, tax, and/or customs duties in accordance with the Zakat, tax, and customs laws and regulations.
• The jurisdiction and grievance procedure in Section 2, Article 3 is now expanded to include the public rights claim. Additionally, the Committees have been granted the authority to impose penalties.
• Each objection should be addressed with a separate lawsuit.
• The Committee has the right to retract its decision after pronouncing it but before delivering the decision to the parties involved.
• A new means of communication is added and includes a notification to the address recorded in the commercial registry.
• The response period provided to the plaintiff on the defendant’s memorandum is 10 days from the date of notification, and in the event of no response, the case will be referred to the competent circuit.
• The circuit will come to a decision within 30 days from the first session and may extend it further 15 days, where required.
  

The detailed rules are available on this link.

For more discussions on how the changes in the rules can affect your business, please contact our tax team: