Zakat, Tax and Customs Authority (ZATCA) announced a significant initiative aimed at providing relief to taxpayers. The "Exemption of Fines Initiative" is set to commence on 1st January 2025, and will run until 30th June 2025. This initiative is part of ZATCA's ongoing efforts to mitigate the financial implications resulting from the COVID-19 pandemic and to encourage compliance among taxpayers
Key Highlights of the Amnesty Initiative
Exemption from Unpaid Financial Fines:
- Taxpayers will be exempt from fines resulting from late registration in all tax laws and regulations
- Delayed payment fines and overdue tax return submission fines will also be exempted
- Penalties for correcting VAT returns and violations related to VAT field detection and E-invoicing will be waived, as per Article 45 of the VAT Law
Conditions for Exemption:
- Taxpayers must register in the tax system if they were previously unregistered
- All required tax returns must be submitted to ZATCA, and any undeclared taxes must be correctly declared and paid. Alternatively, taxpayers can apply for an installment plan and adhere to it until the end of the initiative on June 30, 2025.
- Exemption from late payment fines will be granted for dues that are scheduled to be paid after the initiative period, provided the installment plan is followed
Types of Taxes Included:
The initiative covers various taxes, including Value Added Tax (VAT), Income Tax, Withholding Tax, Real Estate Transaction Tax (RETT), and Excise Tax
Exclusions:
- Fines paid before the effective date of the initiative are not included.
- Penalties resulting from tax returns that must be submitted after December 31, 2024, are excluded.
- Fines resulting from tax evasion violations are also excluded
Steps to Benefit from the Initiative
Submit Tax Due Installment Request:
- Taxpayers must submit a request for a tax due installment to ZATCA during the initiative period
- The request will be reviewed and approved by ZATCA to ensure the taxpayer qualifies for the installment plan
Adhere to the Installment Plan:
Payments will be scheduled under specific periods as per the procedures and conditions of the tax due installment