Saudi Arabia executed economic relief strategies in March 2020 in order to mitigate the economic impact of COVID-19 on domestic businesses. One of these initiatives was a tax amnesty program that offered taxpayers relief from repercussions associated with tax returns, liable to certain conditions. The amnesty was initially valid from 18 March to 30 June 2020, however, it was later twice extended: first, until 30 September 2020, then once again, until 30 June 2021.
The Zakat, Tax and Customs Authority (ZATCA) revealed the return of the tax amnesty program on 1 June 2022 and has now announced the extension by the authority for an additional six months, ending on May 31, 2023. ZATCA additionally amended the Simplified Guideline to clarify the advantages of the extended tax relief efforts.
Taxes Considered in Tax Amnesty KSA
Several Tax penalties and fines are subject to an exemption due to the Tax Amnesty in Saudi Arabia including,
- Value-added tax (E-invoice included)
- Excise tax
- Corporate income tax
- Withholding tax
- Real estate transaction tax
Types of Fines and Penalties Included in KSA Tax Amnesty
ZACTA has also included some fines that will be implemented in this initiative which are:
- Registration past the due date
- Late payment
- Delayed filing
- Alterations to tax declarations
Other monetary sanctions are imposed in accordance with Article 45 of the VAT Law. They could encompass field inspection penalties for failing to comply with e-invoicing laws or other breaches of the Law or VAT Regulations, in addition to fines for not preserving tax invoices, files, and accounting documents.
Fines and Penalties Excluded from KSA Tax Amnesty
These categories are not covered by the Saudi Arabian Tax Amnesty initiative:
- Fines that were settled before the initiative's start date.
- Penalties for tax evasion offenses.
Deadline: Fees for late payments pertaining to tax principal that is part of an installment plan and is due after the amnesty period expires on May 31, 2023.
The KSA Tax Amnesty program allows individuals and companies to correct their tax affairs & avoid penalties through an application process within May 2023. Taxpayers must meet specific requirements in order to take advantage of the initiatives, which include, among other things, filing any unfiled tax returns and paying all outstanding taxes in full.
It is important to take into account that taxpayers have the choice to settle these taxes in installments in accordance with a ZATCA-approved plan. This way the taxpayers can also profit from the elimination of late payment fees for installment payments due after May 31, 2023. In contrast to earlier amnesty programs, where penalties for tardy payments continued to apply to installment dues after the amnesty period had ended, this serves as an excellent move from the UAE government.
Application for KSA Tax Amnesty
Eligible taxpayers have to submit an application to the ZATCA prior to the due date- May 31, 2023, for their request to be taken into account for the KSA tax amnesty legal procedure. An application form must typically be submitted along with any required paperwork, such as tax returns and receipts for payments.
It is important to remember that each taxpayer's particular set of factors will determine the degree to which they qualify for the tax amnesty program. It is advised to speak with a competent tax professional like us or request advice from ZATCA directly if you need help with the enrollment process or have concerns about your eligibility.
Tax Advisory services in Saudi Arabia
At BMS Auditing we ensure our Tax consultants in Saudi Arabia make this complex process seamless with their years of knowledge and experience. We see the extension of the amnesty program as a great chance for your company to make sure it complies with every regulation and law pertaining to taxes.
To help you benefit from this amnesty, our knowledgeable tax team is ready to help you with providing an application for KSA Tax Amnesty, verifying the health of any prior tax returns in incredible detail, reviewing and, if required, delivering amended tax returns, aiding with the ZATCA installment plans, examining any unfiled tax returns and submitting them.
Reach out to us for more advice and inquiries!
1. Why was tax amnesty in Saudi Arabia implemented?
Saudi Arabia announced a tax amnesty program as an initiative to provide relief to businesses that were suffering financial losses during the start of the pandemic. ZATCA announced the cancellation of fees and penalties for taxpayers and relief from repercussions associated with tax returns
2. What are the taxes exempted by ZATCA in Tax Amnesty?
Various taxes including Value-added tax, Excise tax, Corporate income tax, Withholding tax, and Real estate transaction tax are exempted tax listed in this program.
3. Can taxpayers pay the taxes in installments?
Yes, you can pay taxes in installments by filing an official request and getting your plan approved by the authorities in ZATCA.
4. What fees are included under the exemption in the Tax Amnesty Program?
Tax Amnesty Program includes exemption of Registration past the due date, Delayed payment, Delayed filing, and Alterations to tax declarations.
5. Can I register for the tax amnesty after the date?
Yes, you can register for the tax amnesty after the date but ZATCA charges late fees and penalties for delayed registration.