Saudi Arabia Extends Amnesty Initiative to Waive Penalties on All Taxes
Extension of Amnesty Initiative until May 2023
The Zakat, Tax and Customs Authority (ZATCA) has announced the extension of its amnesty initiative, which waives penalties on all taxes, including income tax, withholding tax, value added tax (VAT), excise tax, and real estate transaction tax. This extension will be effective until May 2023.
Background of the Initiative
The amnesty initiative was first introduced to encourage taxpayers to comply with their tax obligations without facing penalties for past errors or omissions. The initiative aims to mitigate the impact of the COVID-19 pandemic on taxpayers and help them navigate the complexities of tax compliance.
Benefits of the Initiative
Under this initiative, the following benefits will be available:
- Waiver of fines resulting from late registration in all taxes
- Waiver of payment delay fines and fines related to delayed filing of tax returns
- Waiver of fines resulting from amendment of VAT returns
- Waiver of fines resulting from field detection of violations of VAT and e-invoicing regulations
Key Exclusions
However, the following exclusions will apply:
- Fines paid before the effective date of the initiative
- Fines resulting from tax evasion violations
- Fines associated with returns due after November 30, 2022
Conditions for Receiving Benefits
To receive a benefit from this initiative, taxpayers must register their businesses with ZATCA for applicable taxes and submit outstanding returns along with payment of due tax liability.
Changes Compared to Earlier Amnesty Programs
The extension is seen as a welcome change compared to earlier amnesty programs when delay fines were applicable on installments due after the end of the amnesty period. Taxpayers can now make payment of due taxes on installments according to an installment plan approved by ZATCA, and will benefit from waiving late payment penalties on installments due after May 2023.
Contact Information
For more information, contact a KPMG tax professional at philippestephanny@kpmg.com.