Saudi Arabia further extends tax amnesty initiative through 30 June 2024

Executive summary

On 29 December 2023, Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) announced through its website that it is further extending the "Cancellation of Fines and Exemption of Financial Penalties" for certain taxes until 30 June 2024. The ZATCA had previously published a Simplified Guide — Cancellation of Fines and Exemption of Financial Penalties (pdf) to help taxpayers understand the details of the initiative.

The initiative, previously extended from 1 June 2023 through 31 December 2023, has been extended for another six months to provide relief to taxpayers who meet the qualifying requirements.

Detailed discussion

Background

In March 2020, the ZATCA launched a tax amnesty program to help businesses mitigate the financial challenges of COVID-19. This initiative has been extended multiple times over the past three years, most recently until 31 December 2023.

For details on previous Saudi tax amnesty programs and their effective periods, refer to the latest EY Global Tax Alert: Saudi Arabia further extends tax amnesty initiative until 31 December 2023, dated 31 July 2023.

Highlights of the amnesty program

The extended amnesty program covers the following:

• Exemption from unpaid fines, including:
  • Fines resulting from late registration under all tax laws and regulations.
  • Delayed payment fines and overdue tax return submission fines under all tax laws and regulations
  • Value-added tax (VAT) return correction penalty
  • Fines for violations of VAT field detection and e-invoicing, based on Article 45 of the VAT Law
• Exemption from late-payment fines in the instalment plan approved by the ZATCA on payments due after the end of the period of the initiative

The extended amnesty excludes penalties related to tax evasion and fines paid before the initiative's initial effective date of 1 June 2022.

The exemption shall be subject to specific conditions, including the following:

• Taxpayers must be registered with the ZATCA to benefit from the exemption.
• Taxpayers should file all pending or incorrect tax returns and pay the resulting principal amount or apply for instalments after filing.

Implications

Businesses operating in Saudi Arabia should assess their current tax compliance and ZATCA-issued assessments, and leverage the applicable tax amnesty programs before 30 June 2024.

Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young Professional Services (Professional LLC), Riyadh

• Asim Sheikh, Saudi Arabia Tax Market Segment Leader
• Ahmed H Akeel, Business Tax Services
• Amr Farouk, Global Compliance & Reporting
• Atif Khan, Global Compliance & Reporting
• Esraa Albuti, Business Tax Services
• Hosam Abdulkareem, Business Tax Services
• Imran Iqbal, Global Compliance & Reporting
• Mirza Ashraf, Global Compliance & Reporting
• Babar Ali, Business Tax Services
• Wissam Merhej, Business Tax Services
• Carl Suchtelen, Global Compliance & Reporting
• Rula Dajani, Business Tax Services
• Suleiman Mohammed, Global Compliance & Reporting
• Billy Thorne, International Tax and Transaction Services
• Carsten Kuhlmann, International Tax and Transaction Services
• Ricardo M. Cruz, Saudi Arabia ITTS and Transfer Pricing Leader
• Mohammed Bilal Akram, Indirect Tax
• Peter Dylewski, Indirect Tax

Ernst & Young Professional Services (Professional LLC), Jeddah

• Ayman Abu El lzz, Global Compliance & Reporting
• Hussain Asiri, Business Tax Services
• Amro El Fadly, Business Tax Advisory
• Ahmed Mubarak, Business Tax Services
• Dana D. Dandashi, Global Compliance & Reporting
• Khalid Feroze, Business Tax Services
• Asem Habis, Business Tax Services
• Suleman Mulla, International Tax and Transaction Services
• Adrian Smith, Indirect Tax
• Mohsin Rehmani, Indirect Tax

Ernst & Young Professional Services (Professional LLC), Al Khobar

• Sanjeev Fernandez, Saudi Arabia Indirect Tax Leader
• Syed Farhan Zubair, Global Compliance & Reporting
• Ali K. Khamis, Business Tax Services
• Bilal Mian, Global Compliance & Reporting
• Javed Aziz, Global Compliance & Reporting
• Haytham Hassan, Global Compliance & Reporting
• Waqas Khan, Business Tax Services

EY Consulting LLC, Dubai

• Aamer Bhatti, MENA Indirect Tax Leader
• Guy Taylor, MENA Transfer Pricing Leader

Ernst & Young — Middle East, Bahrain

• Miranda Baas, International Tax and Transaction Services
• David J. Macklin, International Tax and Transaction Services
• Patrick Oparah, International Tax and Transaction Services - Transfer Pricing
• Ali Almahroos, Indirect Tax
• Jack Sims, Indirect Tax
• Shane Durran, Indirect Tax

Ernst & Young LLP (United States), Middle East Tax Desk, New York

• Asmaa Ali

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.