Saudi Arabia's Zakat, Tax and Customs Authority officials have come up with more good news about the abolition of penalties and exemption from fines policy for an additional 6 months, starting from December 1, 2022 and ending on May 31, 2023.
Saudi authorities say the extension of the initiative is out of a desire to help eligible taxpayers benefit from it in order to minimize the consequences of the 2019 coronavirus pandemic. For us cross-border sellers, this is great news!
Let us review again what penalties can be waived.
1. Late Registration Tax Identification Number
2. Late payment of taxes
3. Late submission of declarations
4. Correction of VAT returns
5. Penalties related to general VAT requirements
6. Implementing penalties related to electronic invoicing requirements.
In order to apply for a fine waiver, the following conditions must be met:
Submit registration between June 1, 2022, and May 31, 2023, to reduce or waive fines for periods prior to November 30, 2022
(1) Enterprises are registered through the tax system;
2) Submit all returns that are due;
(3) Payment of the full amount of the corresponding tax (payment by installments is supported).
It is important to note that the waiver does not cover:
1. Tax evasion;
2. penalties paid before the effective date of the Initiative (before June 1, 2022)
3. filing-related penalties incurred after the end of the initiative period (November 30, 2022) in an installment plan approved by the authority. (e.g. if a seller incurs a late filing on April 31, 2023, the late payment tax penalty is not waived)
What should I do in order to be eligible for the penalty waiver?
Sellers must register in the tax system through a tax agent within the required dates (June 1, 2022 to May 31, 2023), as well as file a late registration affidavit and return with the Directorate General of Revenue, properly disclose all outstanding taxes, and pay the amount of tax due by the May 31, 2023 deadline, which will provide relief from penalties incurred prior to November 30, 2022.
Green Circle is a Middle East tax expert with first-hand tax resources in Saudi Arabia and the United Arab Emirates, a clear price advantage, and an industry leader in time efficiency and service, and is a benchmark enterprise for one-stop Middle East tax services.
Given our previous experience in dealing with many sellers in the UAE who have had their penalties waived, as well as dealing with many cases of unreasonable fines, tax claims, and penalty waivers in Saudi Arabia, we are very familiar with the tax penalty waiver policy and the commencement of tax installments for Saudi sellers, and we are able to help sellers who are willing to comply with the regulations to minimize their tax burden.
Meanwhile, for unreasonable fines imposed by the Inland Revenue Department (IRD), Green Circle can contact the IRD for the seller to file a complaint, so that the seller will not have to worry about the future.
If you have any questions about the Saudi Arabia tax penalty waiver policy, please feel free to contact us.
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