December 6, 2022
Saudi Arabia extends tax amnesty initiative
On 30 November 2022, Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA or the Authority) announced through its portal, the extension of its initiative to cancel fines and financial penalties for certain taxes from 1 December 2022 to 31 May 2023. The amnesty was extended to reduce the economic effects of the COVID-19 pandemic on businesses in Saudi Arabia.
In March 2020, Saudi Arabia first introduced economic relief initiatives to alleviate the economic impact of COVID-19 for businesses in the country. The initiatives included a tax amnesty program to provide relief to taxpayers from fines relating to tax returns, subject to certain conditions. The relief initially covered the period from 18 March to 30 June 2020 and was extended twice until 30 September 2020 and until 30 June 2021.
Further, on 1 June 2022, the ZATCA announced the relaunch of the tax amnesty program, which has now been extended for an additional six months, i.e., until 31 May 2023. The ZATCA has also issued an updated version of the Simplified Guideline, explaining the benefit of the extended tax amnesty initiative.
The key points of the extended tax amnesty initiative are as follows:
The extended tax amnesty covers the period from 1 December 2022 to 31 May 2023.
The amnesty initiative applies to fines and penalties relating to the following taxes:
Types of fines covered
Exemption from unpaid fines, including:
The amnesty initiative excludes the following:
To avail of the benefit of the initiatives, taxpayers need to meet certain conditions, such as full payment of the principal tax due and filing of any unfiled returns, among others.
Businesses should carefully review their ongoing compliance practices and any assessments issued by the ZATCA and evaluate whether the amnesty may benefit them.
For additional information with respect to this alert, please contact the following:
EY Consulting LLC, Dubai
Ernst & Young Professional Services (Professional LLC), Riyadh
Ernst & Young Professional Services (Professional LLC), Jeddah
Ernst & Young Professional Services (Professional LLC), Al Khobar
Ernst & Young LLP (United States), Middle East Tax Desk, New York