As part of the efforts to ease the burden on businesses:
The Zakat Tax and Customs Authority (ZATCA) announced that the Minister of Finance has issued a decision extending the Initiative for the Cancellation of Fines and Exemption from Financial Penalties for taxpayers subject to all tax laws for an additional six calendar months, effective from 1 July 2026.
Penalties Covered by the Initiative:
- Late registration penalties under all tax laws.
- Late payment penalties.
- Late filing penalties for all tax returns.
- Penalties related to the correction of VAT returns.
Conditions for Benefiting from the Initiative:
- The taxpayer must be registered with the Authority for tax purposes.
- All tax returns required to be submitted to the Authority must be filed.
- The full principal amount of the tax liability relating to the due tax returns must be paid.
- Taxpayers may apply to the Authority for an installment plan, provided that the request is submitted during the validity of the initiative and that all installments are paid on their respective due dates in accordance with the installment plan approved by the Authority.
Penalties Not Covered by the Initiative:
- Penalties related to tax evasion violations.
- Penalties imposed under Article 45 of the VAT Law.
- Penalties that were paid before the effective date of the initiative.
Penalties related to any tax return that is required to be submitted to the Authority after 30 June 2026.
New Provision Introduced Under the Initiative:
If there is a need to extend the initiative beyond 31 December 2026, any subsequent extension will not cover penalties related to any tax return that is required to be submitted after 30 June 2026.