Tax Alert: Extension of the initiative of penalties waiver

ZATCA had extended the waiver of Fines and Penalties Initiative until the end of May 2023 under the tax amnesty relief. The relief is a part of the incentives initiated by ZATCA to mitigate the financial implications resulting from COVID-19 that affected businesses in Saudi Arabia.

Applicability:

This amnesty is applicable for penalties relating to corporate income tax, withholding tax, value-added tax, excise tax and real estate transaction tax.

Following is the detail of fines to which this amnesty initiative applies:

• Fines resulting from the late registration in all taxes
• Payment delay fines and fines related to delay in filing tax returns
• Fines resulting from amendment of VAT returns
• Fines resulting from field detection of violations of VAT and e-invoicing regulations.

Fines exclusion from amnesty

The amnesty initiative excludes the following fines:

• Fines paid before the effective date of the initiative
• Fines resulting from tax evasion violations
• Fines associated with returns due after 30 November 2022

Mandatory Requirements

To get benefit from this initiative, ZATCA has clearly stated below mandatory requirements which includes:

• The registration of business with the ZATCA for the applicable taxes
• Submission of outstanding returns along with payment of due tax liability

Note: It is important to note that taxpayers have the right to make payment of due taxes on installments according to an installment plan approved by ZATCA, and the taxpayers will benefit from waiving the late payment penalties on installments due after end of May 2023. This is a welcome change in comparison to earlier amnesty programs where the delay fine was applicable on the installments due after the end of the amnesty period.  

We consider the extension of the amnesty initiative as an opportunity for your business to ensure compliance with tax laws and regulations.

Our tax team will be available to support your business in the below activities to avail the benefits of this amnesty

• Health check review for your submitted tax returns
• Review and submission of any outstanding returns
• Review and submission of amended returns, where needed
• Assist in the submission of the installment plan with ZATCA

For any additional information with respect to this alert, please contact our tax team as follows: