Taxpayers with outstanding fines or penalties may take note of a favourable update. The Zakat, Tax and Customs Authority (ZATCA) has announced an extension of its amnesty initiative, formally titled the Cancellation of Fines and Exemption of Financial Penalties, through to December 31, 2025. This extension provides taxpayers across Saudi Arabia with an additional six-month period, commencing July 1, 2025, to regularise their tax positions without incurring additional financial penalties.

The initiative aims to ease the financial burden on businesses and individuals alike, encouraging voluntary compliance with tax regulations by offering a clean slate for past missteps.

• Who Can Benefit?

This extension applies to all taxpayers subject to Saudi tax regulations, including both business entities and individuals. That includes taxes like:

• Corporate Income Tax (CIT)
• Withholding Tax (WHT)
• Value-Added Tax (VAT)
• Excise Tax
• Real Estate Transaction Tax (RETT)
• What’s Covered?

ZATCA is waiving penalties related to:

• Late tax registration
• Delayed payments or late filing of returns
• VAT return corrections
• E-invoicing rule violations
• Other general VAT-related breaches

It’s an opportunity to catch up without the burden of extra financial penalties.

• What’s Not Included?

Not everything qualifies. The initiative doesn’t cover:

• Penalties related to tax evasion
• Fines that were already paid before July 1, 2025
• Penalties on returns that are due after June 30, 2025

Therefore, taxpayers falling within these categories will not be eligible for the exemption.

• How to Take Advantage

To be eligible for the exemption, the following conditions must be met:

• Be registered under the relevant tax laws
• File all your outstanding returns
• Pay the full tax due (excluding the waived penalties)
• If needed, apply for an instalment plan, but make sure it’s approved by ZATCA and all payments are made on time

Compliance with these requirements will result in exemption from late payment charges and associated fines.

• Conclusion

The Zakat, Tax and Customs Authority (ZATCA) urges all qualifying individuals and entities to proactively utilize this extended window of opportunity to resolve outstanding tax obligations and benefit from the waiver of fines and penalties before the initiative concludes on the stipulated deadline.