Saudi Arabia further extends tax amnesty initiative until 31 December 2025

• Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) announced, on 27 June 2025, another six-month extension of the tax amnesty initiative, effective 1 July 2025.
• The tax amnesty initiative, which had previously been extended until 30 June 2025 and is now extended until 31 December 2025, is expected to provide relief to taxpayers who meet the qualifying requirements.

Executive summary

On 27 June 2025, Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) announced the Minister of Finance's decision to further extend the Cancellation of Fines and Exemption of Financial Penalties initiative for taxpayers subject to all tax laws for six months, until 31 December 2025.

The initiative, previously extended until 30 June 2025, has been further extended for another six months to continue to provide relief to taxpayers and businesses who meet the qualifying requirements. The ZATCA has published a Simplified Guide — Cancellation of Fines and Exemption of Financial Penalties (PDF) to help taxpayers understand the details of the initiative.

Detailed discussion

Background

In March 2020, the ZATCA had introduced the tax amnesty initiative to alleviate the economic impact of the COVID-19 pandemic for businesses in the country. The purpose of the initiative was to provide relief to taxpayers from fines relating to tax returns, subject to certain conditions. This initiative has since been extended multiple times, with the latest extension being from 31 December 2024 to 30 June 2025.

For more information on the previous Saudi tax amnesty program, please refer to EY Global Tax Alert, Saudi Arabia further extends tax amnesty initiative until 30 June 2025, dated 2 January 2025.

Highlights of the tax amnesty extension

Exemption from unpaid fines is provided in the following cases:

• 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 penalties
• Fines for violations of VAT field detection and e-invoicing, based on Article 45 of the VAT Law

Exemption is also provided from late-payment fines in the ZATCA-approved installment plan for payments due after the end of the amnesty initiative.

Eligibility for exemption

To be eligible for exemption, taxpayers should fulfill certain conditions, including registering with the ZATCA, filing pending or corrected tax returns and paying the resulting principal amount or applying for installments after filing.

The taxpayer will be exempt from late-filing fines relating to a return that was due to be filed with the ZATCA before the effective date of the extension, i.e., before 1 July 2025.

Taxpayers will not be exempt from fines resulting from tax evasion violations.

Implications

The further extension of the amnesty initiative until 31 December 2025 provides another opportunity for businesses and taxpayers to rectify any discrepancies or errors in their tax records and avoid late-payment fines.

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

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