(MENAFN- Khaleej Times)

Saudi Arabia announced an extension of a tax amnesty programme until December 31, 2025.

The initiative, running from July 1, cancels fines and exempts establishments from financial penalties incurred as a result of overdue tax returns filing or violations.

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First implemented in 2020 by Zakat, Tax and Customs Authority (Zatca), the scheme was introduced with the aim to help establishments cope with the financial implications of Covid.

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Types of taxes included

• Value Added Tax (Vat)

• Withholding Tax

• Excise Tax

• Income Tax

• Real Estate Transaction Tax (Rett)

Exemption from fines

Subject to certain conditions, the following fines will be exempted under this programme:

• Fines from late registration in all tax laws and regulations

• Delayed payment fines, overdue tax return submission in all tax laws and regulations

• Vat return correction penalty

• Fines for violations of Vat field detection and e-invoicing, based on Article 45 of the Vat law

What are the conditions for exemption?

• Non-registered persons must register in the tax system

• Submitting all required tax returns to Zatca. This includes those that have not been previously submitted, and correctly declaring all undeclared tax returns

• Paying the full tax debt principal. Applicants can also apply for an installment scheme, subject to certain conditions listed below.

• These exemptions are eligible on tax returns which should have been filed before July 1. They do not apply on penalties from tax returns that should be filed after June 30.

Installment plan

• The request for paying dues through an installment plan can be submitted before the scheme ends.

• The request will be reviewed by Zatca to ensure the taxpayer is qualified for the installment plan.

• The payments shall then be scheduled under specific periods

• However, if the installments are not paid on time, the plan will be cancelled.

• If the approved plan is cancelled, the exempted fines and those relating to the principal unpaid tax will then be imposed, depending on the original payment due date.

If the taxpayer is on an approved installment plan, all payable dues will be exempted from late payment fines, even after the end of the exemption initiative.

What are the tax violations?

The Vat violations include:

• Failure to comply with issuing tax invoices

• Lack of compliance in including all tax invoices requirements in the invoices or credit and debit notes

• Failure to maintain the accounting invoices, records and documents through the maintenance period specified in the regulation

• Failure to issue or provide the credit and debit notes to the client

• Incorrect calculation of the tax due

• Prevention or hindering Zatca employees from performing their functional tasks or duties

• Violation of any other provision of the Vat law or regulation

Vat violations of e-invoicing provisions include:

• Failure to issue and maintain invoices and notes electronically

• Failure to comply with maintaining e-invoices and notes according to the requirements provided in the regulation

• Failure to inform Zatca of any malfunctions that hinder the process of issuance of e-invoices and notes

• Failure to include the QR code in the e-invoice

• Inclusion of the prohibited functions in the e-invoicing system used to issue and maintain invoices electronically

• Deletion or amendment of the e-invoices and notes after issuance

• Violation of any other provision of e-invoicing and implementation regulations

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