Executive summary

On 1 January 2026, Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) announced the Minister of Finance's decision to further extend for six months the Cancellation of Fines and Exemption of Financial Penalties initiative for taxpayers subject to all tax laws, until 30 June 2026. The amnesty is effective from the date of the announcement.

The initiative, previously extended until 31 December 2025, has now been extended for another six months to continue to provide relief to taxpayers and businesses that meet the qualifying requirements. The ZATCA has published a Simplified Guide — Cancellation of Fines and Exemption of Financial Penalties to help taxpayers understand the details of the initiative.

Background

In March 2020, the ZATCA had introduced the tax amnesty initiative to alleviate the economic impact of the COVID-19 pandemic for businesses in the country. The purpose of the initiative was to provide relief to taxpayers from fines relating to tax returns, subject to certain conditions. This initiative has since been extended multiple times.

For more information on the previous Saudi tax amnesty program, see EY Global Tax Alert, Saudi Arabia further extends tax amnesty initiative until 31 December 2025, dated 7 July 2025.

Highlights of the tax amnesty extension

Exemption from unpaid fines is provided in the following cases:

• Fines resulting from late registration under all tax laws and regulations
• Delayed-payment fines and overdue tax return submission fines under all tax laws and regulations
• Value-added tax (VAT) return correction penalties
• Fines for violations of VAT field detection and e-invoicing, based on Article 45 of the VAT Law

Exemption is also provided from late-payment fines in the ZATCA-approved installment plan for payments due after the end of the amnesty initiative.

Eligibility for exemption

To be eligible for exemption, taxpayers need to fulfill certain conditions, including registering with the ZATCA, filing pending or corrected tax returns and paying the resulting principal amount or applying for installments after filing.

The taxpayer will be exempt from late-filing fines relating to a return that was due to be filed with the ZATCA before the effective date of the extension (i.e., before 1 January 2026).

Taxpayers will not be exempt from fines resulting from tax evasion violations and fines paid before the initiative's effective date.

Implications

The further extension of the amnesty initiative until 30 June 2026 provides another opportunity for businesses and taxpayers to rectify any discrepancies or errors in their tax records and avoid late-payment fines.