Saudi Arabia has extended its tax amnesty initiative, offering significant relief to businesses by cancelling penalties related to overdue tax filings and violations. The extension, announced by the Zakat, Tax and Customs Authority (ZATCA), will now run until December 31, 2025.
Originally launched in 2020 to mitigate the economic impact of the COVID-19 pandemic, the amnesty programme allows companies to regularise their tax status without facing financial penalties, provided they meet specific conditions.
The programme, which resumed on July 1, covers a wide range of tax categories, including:
-
Value Added Tax (VAT)
-
Withholding Tax
-
Excise Tax
-
Income Tax
-
Real Estate Transaction Tax (RETT)
Scope of Fine Exemptions
Under the extended initiative, businesses can benefit from exemptions on several types of fines, including:
-
Late registration across all tax laws
-
Delayed tax payments and overdue return submissions
-
VAT correction penalties
-
Infractions related to field detection and e-invoicing, as outlined in Article 45 of the VAT law
Eligibility Requirements
To qualify for the exemptions, businesses must:
-
Register with the tax system if not already registered
-
Submit all previously unfiled tax returns and accurately declare any undeclared ones
-
Pay the full tax due, either as a lump sum or through an installment plan
The exemptions only apply to tax returns that were due before July 1, 2025. Any penalties related to filings due after that date will not be covered under this scheme.
Installment Plan Option
ZATCA will accept requests for installment payment plans during the amnesty period. Once approved, taxpayers can spread their payments over scheduled periods without incurring late payment fines. However, failure to adhere to the payment schedule will result in the reinstatement of all previously waived penalties and fines.
VAT-Related Violations
ZATCA clarified the types of VAT violations covered under the initiative, which include:
-
Failure to issue or properly format tax invoices
-
Inadequate record-keeping of accounting documents
-
Incorrect calculation of VAT due
-
Hindering ZATCA officials from carrying out inspections
-
Non-compliance with e-invoicing regulations, such as failing to include QR codes or notify authorities of system failures
Businesses are advised to make use of the extended window to regularise their tax affairs without the burden of financial penalties. ZATCA emphasized that this move aims to improve compliance and foster a more transparent and efficient tax environment in the Kingdom.
