The Zakat, Tax and Customs Authority (ZATCA) of Saudi Arabia has extended its tax penalty exemption initiative until 30 June 2025, offering a valuable opportunity for businesses to regularize their fiscal position without incurring administrative fines.
A strategic initiative to support tax compliance
The “Cancellation of Fines and Exemption of Penalties Initiative”, promoted by ZATCA, is addressed to all taxpayers under Saudi tax regulations. The aim is to promote voluntary compliance and assist companies in aligning with local tax requirements.
The initiative includes exemptions from penalties related to:
- late registration in tax systems;
- delays in tax payments and return submissions;
- late corrections of VAT returns;
- violations identified during field inspections, including those related to e-invoicing regulations.
Eligibility criteria
To benefit from the exemption, taxpayers must:
- be duly registered with ZATCA;
- submit all outstanding tax returns;
- pay the full principal amount of any tax due.
Taxpayers may also request an installment payment plan, provided that:
- the request is submitted before 30 June 2025;
- all installments are paid on time as per the plan approved by ZATCA.
Excluded penalties
The initiative does not apply to:
- penalties already paid prior to the initiative;
- penalties related to tax evasion.
Guidance and support available
ZATCA provides a simplified guideline on its official website, outlining:
- the types of penalties covered;
- conditions for exemption;
- steps to request installment payments;
- examples of eligible field violations.
Why this matters to international businesses
Foreign companies already operating in Saudi Arabia — or planning market entry — can take advantage of this initiative to resolve any outstanding tax obligations and build a solid, compliant presence in the Kingdom.
Kelmer Group supports businesses in navigating tax compliance and international expansion across Saudi Arabia and the wider GCC region.
Contact us for tailored assistance on accessing the initiative and mitigating future tax risks.
Source: https://www.arabianbusiness.com/industries/banking-finance/saudi-arabia-issues-tax-update