Tax Alert: Extension of the tax amnesty scheme until 30 June 2025

On 29 December 2024, the Zakat, Tax, and Customs Authority (ZATCA) announced the extension of the “Cancellation of Fines and Exemption of Financial Penalties” initiative, until 30 June 2025.

The initiative had previously been extended until 31 December 2024 and has been further extended for another 6 months, providing relief to taxpayers who meet the qualifying requirements.

We, therefore, highly encourage taxpayers to take advantage of the initiative and the most recent extension by meeting ZATCA’s compliance requirements within the specified timeframes. We provide a refresher of the initiative details below.

The tax amnesty extension is applicable to penalties relating to corporate income tax (CIT), withholding tax (WHT), value-added tax (VAT), excise tax, and real estate transaction tax (RETT).

The initiative applies to unpaid fines, including fines related to:

• Late registration under all tax laws and regulations
• Delayed payment
• Late filing of tax returns
• Amendments in VAT returns
•  Violation of VAT field detections
• Violation of e-invoicing regulations

It is important to highlight that the above incentives are applicable to the amendments in any tax returns, either made by the taxpayer under the tax amnesty initiative or by ZATCA through assessments or reassessments.

The tax amnesty initiative excludes the following fines:

• Fines paid before the effective date of the amnesty initiative, i.e., 1 June 2022
• Fines resulting from “tax evasion” violations, including late registration, delay in payment of taxes, late filing of returns, amendments in tax returns, and filed detections
• Fines associated with the tax returns due from 1 January 2025

To benefit from the tax amnesty initiative, the following conditions are required to be met:

• Registration with ZATCA
• Submission of due tax returns along with the payment of due tax liabilities or applying for an installment plan, as approved by ZATCA

Note: It is important to note that taxpayers have the right to make payment of due taxes in installments according to an installment plan approved by ZATCA, and taxpayers can benefit from a waiver of late payment penalties for the installments due after 30 June 2025. However, in case of cancellation of the installment plan as a result of taxpayer noncompliance of the installment plan, ZATCA shall calculate all fines due to the unpaid amounts as of the original payment due date.

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 is available to support your business in the below activities to avail the benefits of this amnesty.

• Review of the assessments raised by ZATCA to evaluate the benefit of availing the amnesty
• Health check review for your submitted tax returns
• Review and submission of any outstanding returns
• Review and submission of revised returns, where needed
• Assist in the submission of the installment plan with ZATCA

For any additional information concerning this alert, please contact our tax team as follows: