Article 65 - Security

1. In cases where the Authority has evidence or reason to doubt that a Taxable Person will not make his VAT and associated payments in an accurate and timely manner, it may require that cash security or a bank guarantee is provided as a precondition for VAT registration, subject to the following requirements:

(a) notification requiring the cash security  or bank guarantee shall be given in writing and shall provide a minimum of twenty (20) days for the Taxable Person to provide the cash security or bank guarantee,

(b) the maximum value of the cash security will be determined based on the estimated average quarterly value of the Output Tax,

(c) any cash security must be held by the Authority in a separate account to the Taxable Person's VAT account,

(d) the Authority shall retain the cash security or require the bank guarantee remain in force for a period of twelve months and in cases where formal collection procedures have commenced in respect of any amounts of VAT, penalties or associated amounts due, and these remain unpaid by the Taxable Person, the Authority may, subject to issuing notification to the Taxable Person, set off the cash security against the unpaid amounts due, or to require payment by the guarantor up to the amount due,

(e) in cases where the original cash  security payment  or  bank  guarantee  is  used to offset VAT, penalties or associated amounts due not paid by the Taxable Person, the Authority may require the Taxable Person to make a new security payment or provide a new bank guarantee,

(f) if the cash security remains held in account in the end of the twelve-month period, it may on the Taxable Person’s request be refunded to the Taxable Person or credited to the Taxable Person’s VAT account to offset any current or future VAT payment due or, based on a decision issued by the Authority, renewed for another one- year period.

2.In cases where a formal review or appeal is lodged against an appealable decision, and the Authority has evidence or reason to doubt that the Taxable Person may not pay the disputed Tax, the Authority may require a cash security or bank guarantee from the Taxable Person up to a maximum value of the unpaid amount of Tax and associated penalties arising in connection with the decision. A notification requiring cash security or a bank guarantee shall be issued in writing.

3.Notwithstanding anything in these Regulations, the Customs Department may require cash security or a bank guarantee from a Person importing Goods into a customs duty suspension regime in the Kingdom for an amount up to the value of Tax that would be payable on the import of those Goods.