On 29 December 2023, Saudi Arabi’s Zakat, Tax and Customs Authority (ZATCA) announced the extension of the “Cancellation of Fines and Exemption of Penalties initiative until 30 June 2024.

ZATCA stated that the initiative’s extension, which ends on 31 December 2023, is motivated by a desire to help taxpayers who meet the requirements benefit from it to reduce the consequences of the COVID-19 pandemic.

ZATCA has also clarified that the fines covered by the exemption decision, according to ZATCA, include fines for late registration in all tax laws, late payment, late filing of returns fines in all tax laws, and fines to correct VAT returns, as well as fines for violations of VAT field control related to applying the e-invoicing regulations and other general regulations.

The Initiative stipulated that in order to take advantage of it, a taxpayer had to be registered with the tax law and submit all previously unsubmitted returns to ZATCA. As well as paying 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 installment payment plan from ZATCA. As long as the application is submitted while the initiative is still in effect and all due installments are paid by the due dates specified in the Authority-approved installment plan, it is essential to note that the initiative excludes penalties related to tax evasion violations, fines paid before the initiative’s effective date.

ZATCA has invited taxpayers to view the details of the initiative through the simplified guideline available on its website, which 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.