KSA Tax Amnesty Initiative

 The Zakat, Tax, and Customs Authority (“ZATCA”) revived its tax amnesty initiative last June 1, 2022 with effectivity of 6 months.

Reminder on the Period of Availment: Until November 30, 2022 only

Covered Taxes

• Value-Added Tax (VAT)

• Withholding Tax (WHT)

• Excise Tax

• Income Tax

• Real Estate Transaction Tax (RETT)

Taxpayers shall be exempt from paying the following penalties incurred within the tax amnesty period upon meeting certain conditions:

Penalties -Late tax registration

Conditions-Register and specify effective tax registration date

• File all tax returns past due pay all tax due

Penalties - Delay in filing and payment of the covered taxes

Condition-File all tax returns past due and pay all tax due

Penalties-Fines from correcting VAT returns

Condition- Pay all tax due resulting from the correction

Penalties-Fines from field detection of violations of VAT and e-invoicing

Condition- Must neither have any unfiled returns nor any outstanding tax due

Exclusions from the Tax Amnesty Program

Fines paid before the effective date of the tax amnesty

Fines for late payment associated with the tax principal included in an installment plan payable after the tax amnesty period.

Tax evasion fines

Key Takeaways

The Tax Amnesty program aims to raise the level of tax compliance in terms of VAT registration, e-invoicing, and timely filing of tax returns and payment of tax due thereof by allowing taxpayers to correct their practices free of any penalties.

Companies should carefully assess their tax compliance and practices and check if they can benefit from the tax amnesty program offered by ZATCA.