In a recent news update on November 30, 2022, the Cancellation of Fines and Exemption of Penalties Initiative has been extended for the taxpayers for an additional period of 6 months from Thursday, December 1, 2022, till May 31, 2023.
Find the news update here.
What is the cancellation of fines and exemption of penalties initiative?
The cancellation of fines and exemption of penalties in an initiative taken by Zakat, Tax, and Custom Authority (ZATCA) for reducing the financial implications that arose due to COVID-19. This initiative exempts various fines and violations on various types of taxes such as Excise Tax, Value Added Tax (including E-Invoicing), Real Estate Transaction Tax, Withholding Tax, and Corporate Income tax.
The exemption of penalties initiative was applicable for a period of 6 months starting from June 2022, till November 2022. However, the recent update announces the extension of this time duration for an additional 6 months. Hence, the exemption shall now be applicable from June 2022 to May 2023.
What is the objective of the extension of the cancellation of fines and exemption of penalties initiative?
As stated by the authorities, the prime objective of the extension of the exemption of penalties initiative is to help the taxpayers who meet the conditions benefit from the initiative to reduce the consequences of the covid-19 pandemic.
What are the penalties covered in the exemption?
The authorities have clarified that the fines covered in the exemption include,
- Fines for late registration in all tax systems
- Late payment of returns fines in all tax systems
- Late filing of returns fines in all tax systems
- Fines to correct VAT returns
- Fines for violations of VAT field control related to applying the e-invoicing regulations and other general regulations.
What are the requirements to take benefit of the cancellation of fines and exemption of penalties initiative?
The authority has also stated that in order to benefit from the initiative, non-registered taxable persons must register with the tax system. They also must submit all undeclared statements due to ZATCA, declare the taxes that have not been declared clearly, and pay the full tax debt related to the statements that should be submitted or amended.
As stated by the authority, in order to benefit from the initiative, the taxpayer must be registered under the tax system. In addition, the taxpayer must also submit any undeclared statement as well as all the principal tax debt associated with the returns that will be submitted or modified to accurately disclose the outstanding tax liabilities.
Installment Plan
The taxpayer has the option to request an installment payment plan from the Authority. As long as the application is submitted while the initiative is effective and the due installments are being paid by the due dates specified under the Authority-approved installment plan, the taxpayer must note that the initiative does not include penalties related to tax evasion violations, fines paid before the initiative's effective date and Fines associated with returns payable after 30 November 2022.
To get a complete overview of the cancellation of fines and exemption of penalties initiative,
Click here.
Moreover, the Authority has extended support and query resolution via a unified call center number (19993), which is available 24/7, or through the Twitter account (@Zatca_Care), e-mail (info@zatca.gov.sa), or instant conversations through the ZATCA's website (zatca.gov.sa).