This official simplified guideline issued by the Zakat, Tax and Customs Authority (ZATCA) outlines the 6-month extension of the Cancellation of Fines and Exemption of Financial Penalties Initiative in Saudi Arabia, running from July 1 to December 31, 2026. Designed to mitigate the economic impacts of COVID-19, the initiative exempts taxpayers from unpaid fines related to late registration, late filing, overdue payments, and VAT return corrections across five tax types (VAT, WHT, Excise Tax, CIT, and RETT). To qualify, businesses must register, file all outstanding returns, and pay the core tax principal or adhere to an approved ZATCA installment plan, while explicitly excluding tax evasion penalties and returns due after June 30, 2026.
Cancellation of Fines and Exemption of Financial Penalties
Simplified Guideline
1 July 2026
Contents
Highlights of the Resolution
Types of taxes included in the Initiative
Exclusions from the Initiative
Conditions for Benefiting from the Initiative
Tax due installment steps
Illustrative Examples of the Initiative
The Zakat, Tax and Customs Authority (ZATCA), issued this Simplified Guideline for the purpose of clarifying certain treatments concerning the implementation of the statutory provisions in force as of the Simplified Guideline issue date. The content of this Simplified Guideline shall not be considered an amendment to any of the provisions of the Laws and Regulations applicable in the Kingdom.
Furthermore, ZATCA would like to highlight that the clarifications and indicative tax treatments, where applicable, shall be implemented by ZATCA in light of the relevant statutory texts. Where any clarification, interpretation or content provided in this Simplified Guideline is modified - in relation to unchanged statutory text - the updated indicative tax treatment shall then be applicable prospectively concerning transactions made after the publication date of the updated version of the Simplified Guideline on the ZATCA's website.
This Simplified Guideline aims to elaborate H.E. Minister of Finance’s Resolution with regard to extension of
Cancellation of Fines and Exemption of Financial Penalties Initiative
which is part of incentive initiatives taken by ZATCA to mitigate the financial implications resulting from COVID-19 that affected the establishments. This is for a period of (6) months, starting from July 1, 2026.
Rectifying the status of your establishment
Exempts you from fines
Take advantage of Exemption of Fines Initiative
During the period July 1 to December 31, 2026
Highlights of the Resolution
Exemption from unpaid financial fines, including:
Exemption from fine resulting from late registration in all tax laws and regulations.
Exemption of delayed payment fines and overdue tax return submission fines in all tax laws and regulations.
Exemption of VAT return correction penalty
Exemption shall be subject to specific conditions, including but not limited to:
Tax registration for non-registrants required to register under the tax system with ZATCA.
Submitting all required tax returns to ZATCA and which have not been previously submitted or correctly declare all undeclared taxes, and paying the full tax debt principal resulting from the submitted/corrected return, alternatively, apply for installment, and follow the approved installment plan, until the end of this initiative on December 2026.
Exemption from late payment fines in the installment plan approved by ZATCA on dues that are due to be paid after the end of the period of this initiative.
The Resolution shall remain effective for (6) months.
Types of Taxes included in the Initiative
The taxpayer shall be exempted from:
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