Extension of Tax Amnesty Initiative

Key Developments

The Tax Amnesty Initiative has been extended for a further period of six (6) months, effective from 1 January 2026.

Accordingly, the initiative will now remain available until 30 June 2026.

Scope of the Amnesty

Subject to meeting the prescribed conditions, the initiative provides relief from the imposition of penalties relating to the following:

• Late registration
• Late filing of tax returns
• Late payment of tax
• VAT return correction penalties
• Unpaid penalties imposed prior to 1 January 2026

The initiative applies to the following tax regimes:

• Value Added Tax (VAT)
• Income Tax
• Withholding Tax
• Excise Tax
• Real Estate Transaction Tax (RETT)

Conditions to Benefit

In order to benefit from the amnesty, taxpayers are required to:

• Submit all outstanding tax returns no later than 30 June 2026, and
• Settle the principal tax due in full, or obtain and comply with an approved installment plan, by 30 June 2026.

Failure to meet either of the above conditions will result in the loss of entitlement to the penalty relief.

Exclusions

The Tax Amnesty Initiative does not apply to penalties arising from:

• Tax evasion violations (Such penalties remain fully enforceable and are explicitly excluded from the scope of the initiative).

 Our Observations

This extension provides taxpayers with an additional opportunity to regularize historical tax positions and mitigate penalty exposure. Taxpayers with unresolved compliance matters, pending filings, or historical assessments should carefully evaluate their positions to determine whether corrective action or voluntary disclosure is appropriate within the extended timeframe.

Given the increasing focus on enforcement and data analytics by Zakat, Tax and Customs Authority (ZATCA), proactive action is strongly recommended.

How We Can Assist

Our Tax team can support you with:

• Assessing eligibility under the Tax Amnesty Initiative
• Conducting tax health checks on historical filings
• Preparing and submitting corrections or voluntary disclosures
• Supporting communications and engagement with ZATCA