Saudi Arabia Urges Businesses to Act Now as Tax Amnesty Ends June 30, 2025

Introduction

Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) has extended its “Cancellation of Fines and Exemption of Penalties Initiative” until June 30, 2025. This tax amnesty program offers businesses the opportunity to waive various penalties—from late filings to VAT corrections—provided they meet certain compliance requirements within the initiative period. With less than two months remaining, companies operating in the Kingdom must move swiftly to capitalize on this window before penalties are reinstated.

Background of the Initiative

Originally launched to encourage voluntary compliance and relieve financial burdens, the initiative has been extended multiple times by ministerial decree. Its primary goal is to bring outstanding filings and unpaid taxes into the regular system without imposing punitive fines. As of December 2024, the initiative was officially extended to June 30, 2025, reinforcing Saudi Arabia’s commitment to supporting businesses through transitional tax reforms.

Which Penalties Are Covered?

Under the initiative, the following categories of penalties are fully or partially exempted:

• Late Registration Fines for failure to register under corporate income tax, VAT, excise tax, or real estate transaction tax.

• Late Filing and Late Payment Penalties assessed under all tax laws.

• VAT Return Amendment Fines, including corrections submitted after original returns.

• E-Invoicing and Field Control Violations, such as noncompliance with electronic invoicing regulations. ZATCA

Exclusions:

Penalties related to tax evasion and any fines paid before the initiative’s effective date remain non-refundable.

Eligibility and Conditions

To benefit from the amnesty, taxpayers must:

1. Be Registered in ZATCA’s tax system for the relevant tax (e.g., VAT, excise, CIT).

2. Submit All Outstanding Returns up to the cut-off date.

3. Settle Principal Tax Liabilities associated with those returns.

4. Request an Installment Plan, if needed, before June 30, 2025, and then adhere strictly to the approved payment schedule. ZATCA

Failure to meet any of these conditions will void the penalty waivers and leave businesses liable for full fines plus additional interest.

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Step-by-Step Guide to Claim the Amnesty

1. Review Tax Records: Identify all tax categories (VAT, CIT, excise, etc.) with unfiled returns or unpaid dues.

2. Register or Verify Registration: Ensure your business is correctly registered in each relevant ZATCA portal.

3. Prepare and Submit Returns: Compile historical data, prepare missing returns, and file them electronically through the e-Services portal.

4. Settle Principal Amounts: Pay the outstanding tax dues in full, or apply for an installment plan via your online account.

5. Download Confirmation: After submission and payment, download official confirmation receipts to avoid disputes in future audits.

   
   

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Strategic Implications for Businesses

• Cost Savings: Businesses can save up to 25% of tax liabilities that would otherwise accrue in fines.

• Improved Compliance: Regularizing tax status enhances corporate reputation and reduces audit risk.

• Cash-Flow Planning: While appetite for lump-sum payments varies, the installment option provides flexibility—but must be respected to retain the waiver.

• Long-Term Alignment: Companies benefit from aligning with Saudi Arabia’s broader Vision 2030 goals of economic diversification and regulatory transparency.

Conclusion

With the June 30, 2025 deadline rapidly approaching, businesses in Saudi Arabia need to act decisively. Leveraging this tax amnesty not only eliminates hefty penalties but also streamlines future compliance. Firms should audit their tax standing today, submit all overdue returns, and settle principal liabilities—ensure any installment plan requests are lodged before the cut-off. Taking these steps now will safeguard against sudden financial shocks and reinforce a compliant, growth-oriented strategy.