New six-month tax amnesty announced
Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) announced on 1 June 2022 the re-launch of an amnesty for tax penalties and fines (“Penalties and Fines Exemption Initiative). The initiative is an extension of ZATCA’s previous initiatives to reduce the economic and financial effects of the COVID-19 pandemic.
The amnesty—which applies during the six-month period 1 June through 30 November 2022—applies to penalties arising from income tax, withholding tax, real estate transaction tax, VAT and excise tax. Customs duties are outside the scope of the amnesty, as are fines and penalties imposed for tax evasion and penalties paid before 1 June 2022.
Penalties that can be waived under the amnesty include those for late registration, late payment, late filing of returns, correcting VAT returns, fines relating to field inspections and violations related to the e-invoicing rules. Taxpayers can take advantage of the amnesty even if the matter giving rise to the penalty is under appeal or review.
To participate, a taxpayer must meet all requirements and submit an application to ZATCA by 30 November 2022. Specifically, the taxpayer must register with ZATCA (if not already registered), all tax returns must be up to date and all tax due must have been paid. To help taxpayers bring tax payments up to date, a taxpayer may submit a request to ZATCA for an instalment plan, under which instalments must be made within the amnesty period in accordance with the plan agreed with ZATCA. Late payment penalties related to the amount covered by the instalment plan will be waived until the expiry of the amnesty period on 30 November 2022.
ZATCA has published guidelines that include a detailed explanation of the amnesty, the type of fines eligible for relief, the conditions that apply to each type of fine, details on how to apply for an instalment plan and an explanation of the field inspection violations covered by the initiative, with examples.