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Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) has extended the Cancellation of Fines and Exemption of Financial Penalties initiative through 31 December 2025, covering multiple taxes (CIT, VAT, WHT, Excise, RETT) and certain e-invoicing breaches—tax evasion fines remain excluded. Eligible businesses may settle principal tax and cure compliance either by full payment or by an approved installment plan. This guide helps corporate taxpayers choose the optimal route and implement it correctly.
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What the 2025 Amnesty Covers (at a Glance)
Taxes in scope
CIT, VAT, WHT, Excise Tax, and Real Estate Transaction Tax (RETT). :contentReference[oaicite:0]{index=0}
General relief
Waiver/cancellation of specified penalties (e.g., late registration, filing, payment, some e-invoicing breaches) if you register, file outstanding returns, and pay principal tax. :contentReference[oaicite:1]{index=1}
Fines due to tax evasion are excluded from relief. :contentReference[oaicite:2]{index=2}
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Installments vs. Full Payment — How to Choose
| Factor | Full Payment | Installment Plan (Authority-approved) |
|---|---|---|
| Eligibility for penalty waiver | Eligible when principal tax is fully paid and compliance obligations are cured. | Eligible if you apply while the initiative is in effect and then pay each installment on schedule. :contentReference[oaicite:4]{index=4} |
| Cash flow impact | High, one-off outflow. | Spread over months per the approved plan; easier on liquidity. |
| Administrative burden | Lower — faster closure and fewer moving parts. | Higher — application, approvals, and ongoing schedule monitoring via ZATCA portal. :contentReference[oaicite:5]{index=5} |
| Risk of losing relief | Low once paid and returns filed. | Medium — missed installments or breaches may jeopardize relief and trigger re-imposed penalties/collection. :contentReference[oaicite:6]{index=6} |
| Clearance/comfort for audits & tenders | Typically faster to obtain after settlement. | May be deferred until plan milestones are met. |
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How to Apply for an Installment Plan (Step-by-Step)
- Prepare a schedule (e.g., 6–12 months) aligned to your cash flows; ensure all due returns are ready to file.
- Log in to the ZATCA portal and navigate to the relevant e-service (e.g., VAT/CIT installment request) and Create New Request. :contentReference[oaicite:7]{index=7}
- Submit your plan proposal and supporting information; monitor for approval or modifications.
- Comply with each due date; pay via SADAD and retain confirmations. Missing a due date risks losing relief. :contentReference[oaicite:8]{index=8}
Worked Examples (Cash-Flow Lens)
Example A — Full Payment
Principal tax due SAR 1,200,000; penalties eligible for cancellation. Pay SAR 1.2m now → faster closure; zero penalties under initiative.
Example B — 6-Month Plan
Six equal installments of SAR 200,000 each; schedule must be met exactly to retain penalty relief.
Example C — Mixed Approach
Settle VAT in full; place CIT on a 9-month plan to smooth cash outflows while keeping compliance current.
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Compliance Checklist (Save this)
- Confirm your taxes in scope (CIT, VAT, WHT, Excise, RETT) and periods affected. :contentReference[oaicite:10]{index=10}
- Register (if not already), file all outstanding returns, and compute principal tax due. :contentReference[oaicite:11]{index=11}
- Decide full payment vs installments based on liquidity and timing needs.
- If choosing installments: file the request on the ZATCA portal while the initiative is active; diarize each due date. :contentReference[oaicite:12]{index=12}
- Remember: evasion-related fines are excluded from relief. :contentReference[oaicite:13]{index=13}
- Retain submission receipts, SADAD payment proofs, and portal approvals.
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FAQs
- Can I mix full payment and installments across taxes?
- Yes. You can fully settle one tax (e.g., VAT) and request installments for another (e.g., CIT), provided each meets initiative conditions. :contentReference[oaicite:14]{index=14}
- What happens if I miss an installment?
- Late/missed payments may forfeit initiative benefits and expose you to re-imposed penalties and collection measures—stay current with each due date. :contentReference[oaicite:15]{index=15}
- Are e-invoicing penalties included?
- Certain e-invoicing penalties are within the relief scope during the initiative period, subject to meeting conditions. :contentReference[oaicite:16]{index=16}
- Until when can I apply?
- The current window runs through 31 December 2025, but apply early to allow review and to align payment schedules. :contentReference[oaicite:17]{index=17}
References & Official Links
- EY — Amnesty extended to 31 Dec 2025
- KPMG — Extension of penalty cancellation initiative
- DLA Piper — Taxes covered, limitations
- SPA — Installment plan allowed; pay on schedule
- Saudi GOV (My.gov.sa) — Request an Installment Plan e-service
- Avalara — VAT/e-invoicing penalty relief extension
- Grant Thornton — Extension announcement
- Comarch — Extension details and conditions
Disclaimer: This article provides general information only and is not a substitute for professional advice. Confirm your eligibility and payment plan terms on the ZATCA portal or with a licensed Saudi tax advisor.
