Saudi Arabia’s Tax Penalty Cancellation Initiative 2026: Everything You Need to Know
The Zakat, Tax and Customs Authority “ZATCA” announced the extension of the initiative to cancel penalties and exempt taxpayers from financial penalties for all tax systems for an additional 6 months, starting from July 1, 2026, and ending on December 31, 2026. The decision was issued by the Minister of Finance and comes as part of the Authority’s efforts to alleviate burdens on taxpayers and encourage them to rectify their tax positions.
In this article, we explain in detail everything related to this initiative: who it covers, eligibility conditions, and how to apply.
What Penalties Are Included in the Initiative?
The initiative includes exempting taxpayers from four main types of penalties:
- Late registration penalties for all tax systems (VAT, income tax, Zakat, selective tax)
- Late payment penalties for due tax
- Late filing penalties for tax returns in all tax systems
- VAT return correction penalty
What Penalties Are Not Included?
There are penalties that are not covered by the initiative, and you should be aware of them:
- Penalties related to tax evasion violations
- Penalties imposed under Article 45 of the VAT Law
- Penalties that have been paid before the initiative’s effective date (July 1, 2026)
- Penalties related to any return due after June 30, 2026
Eligibility Conditions for the Initiative
To benefit from the penalty cancellation, the following conditions must be met:
- The taxpayer must be registered with the Authority for tax purposes
- Submit all required returns to the Authority
- Pay the full tax principal related to the due tax returns
For taxpayers who cannot pay the full amount at once, the Authority allows the option to submit an installment request for financial dues, provided that:
- The request is submitted during the initiative’s validity period (before December 31, 2026)
- Compliance with paying all installments as per the approved installment plan
How to Apply for the Initiative
To apply for the initiative, you can visit the ZATCA e-Services Portal, log in to your tax account, and submit the required returns and payments. If you wish to apply for installments, you can submit the installment request electronically through the same portal during the initiative’s validity period.
Initiative Guide
ZATCA has provided a simplified guide on its website that details the types of penalties covered by the exemption, eligibility conditions, and steps for installment payments, along with illustrative examples. We advise you to download and review it before applying.
Important Points to Note
There is a very important point: If the initiative is extended again after December 31, 2026, any subsequent extension will not include penalties related to any return due after June 30, 2026. This means that this period is your best opportunity to settle your tax positions.
How to Contact ZATCA
- Unified contact center number: 19993 (24 hours, all week)
- X (formerly Twitter) account “Ask Zakat, Tax and Customs”: @Zatca_Care
- Email: [email protected]
- Live chat on the Authority’s website: zatca.gov.sa
Frequently Asked Questions
Q: Does the initiative include old penalties from previous years?
A: Yes, it includes all late registration, payment, and filing penalties for periods prior to the initiative’s effective date.
Previously, provided that declarations are submitted and the original tax debt is paid.
Q: Can I installment the amount of tax due?
A: Yes, you can apply for installment during the initiative’s validity, and commit to the approved payment schedule.
Q: If I paid the fine before July 1, 2026, can it be refunded?
A: No, the initiative does not include fines that were paid before its effective date.
Q: Does the initiative include tax evasion violations?
A: No, tax evasion is not included in this initiative.
Q: What is the last date to benefit from the initiative?
A: The last date is December 31, 2026, and all declarations must be submitted and dues paid before this date.
Source: Zakat, Tax and Customs Authority – zatca.gov.sa
