Saudi Arabia extends tax penalty relief through 2025

Saudi Arabia has extended its tax penalty waiver initiative until 31 December 2025. The initiative offers relief from fines on late filings, payments, and e-invoicing violations. To qualify, taxpayers must submit outstanding returns and settle principal taxes.

The Saudi Zakat, Tax and Customs Authority (ZATCA) announced on 27 June 2025 that the Minister of Finance has approved a six-month extension of the “Cancellation of Fines and Exemption of Financial Penalties Initiative.” The extension will run from 1 July to 31 December 2025 and applies to taxpayers subject to all Saudi tax laws.

The initiative provides exemptions from penalties related to late registration in all tax laws, late payment, and late filing of returns. It also includes waivers for VAT return correction fines, penalties for field violations regarding e-invoicing regulations, and general VAT provisions.

In order to benefit from the Initiative, the taxpayer must be registered under the tax law and submit all outstanding tax returns to ZATCA. The taxpayer must also pay all the principal tax debt associated with the returns that will be submitted or modified to accurately disclose the outstanding tax liabilities.

Taxpayers can request an instalment payment plan from ZATCA as long as the application is submitted while the initiative is still in effect and all due instalments are paid by the due dates specified in the ZATCA-approved instalment plan. ZATCA emphasised that the initiative does not cover penalties related to tax evasion violations, penalties that were paid before the initiative’s effective date, or penalties related to returns that must be submitted to ZATCA after 30 June 2025.

ZATCA has invited taxpayers to view the Initiative details in the simplified guideline that is available on its website. The Guideline includes a detailed explanation of the most important aspects of the decision, such as the types of penalties that are included in the decision, clarifying the conditions for benefiting from the exempt fines and the steps for installment financial dues, as well as introducing the field control violations.