ZATCA Extends Cancellation of Fines and Exemption of Financial Penalties Initiative until June 2025

The Zakat, Tax and Customs Authority (ZATCA) has announced an extension of the Minister of Finance's decision to prolong the "Cancellation of Fines and Exemption of Financial Penalties" initiative for an additional six months, now lasting until 30 June 2025. This decision offers much-needed relief to taxpayers across the Kingdom by providing exemptions from various financial penalties under all tax laws.

The initiative covers a range of fines, including those for late tax registration, late payment of taxes, and delayed filing of returns. It also includes waivers for penalties related to VAT return corrections, violations of e-invoicing regulations, and general VAT provisions. However, it is important to note that the initiative does not apply to penalties arising from tax evasion, fines that were paid before the initiative's effective date, or penalties related to returns that are due after 31 December 2024.

To benefit from the initiative, taxpayers must ensure they are registered with ZATCA and submit any tax returns that had previously been missed or not filed. Additionally, they must pay the principal tax amount owed for the returns being submitted or amended. If the tax liabilities are substantial, taxpayers can request an instalment payment plan. This plan must be applied for during the period the initiative is active, and all due payments must be made according to the terms outlined in the authority-approved instalment agreement.

ZATCA has made the details of this initiative easily accessible by publishing a simplified guideline on its official website. This guideline provides a detailed explanation of which types of penalties are covered, outlines the specific conditions under which taxpayers can benefit from the exemption, and walks through the process of applying for instalment plans. It also sheds light on penalties associated with field violations, particularly related to VAT and e-invoicing. The ZATCA urges taxpayers to take full advantage of this extension before it ends in June 2025.

By doing so, they can eliminate or reduce the financial burden of penalties while ensuring compliance with their tax obligations. For any questions or further information, taxpayers are encouraged to reach out to ZATCA's 24/7 unified call centre at 19993, where assistance is readily available.