A Golden Opportunity for Business Owners - Zakat Authority Fines Exemption Initiative until June 2026

A Golden Opportunity for Business Owners - Zakat Authority Fines Exemption Initiative until June 2026

Are you a business owner or running a company in Saudi Arabia? Zakat, Tax and Customs Authority (ZATCA) has announced the extension of a great initiative aimed at canceling fines and exempting financial penalties. This initiative runs until June 30,  2026, and is a golden opportunity to settle your tax situation without incurring additional financial burdens.
In this article, we will explain everything you need to know about this initiative in a simple and clear way, away from complexities and difficult terms, so that you can make the best use of it, and to avoid any confusion that may deprive you of this valuable opportunity.

What is the Fine Abolition Initiative?
Simply put, the Fine Cancellation Initiative is a decision by the Zakat, Tax and Customs Authority (ZATCA) that aims to help business owners and businesses ease their financial burdens. This is done by exempting them from the fines they have accumulated due to delay in registering with tax systems, delay in paying taxes, or even delay in filing tax returns. This initiative reflects the Authority's keenness to support the business environment and stimulate voluntary compliance with tax regulations.
The primary objective of this initiative is to support the national economy and encourage everyone to adhere to tax regulations voluntarily and comfortably. The nice thing is that this initiative includes all taxpayers, whether you are an individual who owns a small business, a medium company, or even a large company. This means that everyone can rectify their situation and benefit from the exemptions offered.
However, there is a very important point to pay attention to: this initiative only eliminates fines, not the principal tax owed to you. In other words, you will have to pay the base tax amount, but you will not pay any delay penalties or additional financial penalties. This distinction is very important to understand the nature of the initiative and make proper use of it.

What taxes are covered by the initiative?
The initiative covers all tax systems supervised by the Zakat, Tax and Customs Authority. Here are the most prominent of these taxes that can benefit from the associated exemptions:

• VAT: It is the most common tax that most business owners in the Kingdom are familiar with. Delays in registering, paying or filing returns may result in significant fines. The initiative here provides an opportunity to resolve these situations.

• Deduction Tax: It relates to payments sent by Saudi companies to entities or persons who are not residents of the Kingdom.

• Excise Tax: This is the tax levied on certain products that are considered harmful to health or the environment, such as soft drinks and tobacco.

• Zakat: It is applied to Saudi and Gulf companies and establishments.

• Income Tax: It applies to non-Saudis and GCC nationals who own shares in companies within the Kingdom.

In addition, the initiative also includes violations related to the application of e-invoice provisions, which is very important for shops, restaurants, and companies that use the e-invoicing system. Any irregularities related to them can benefit from this exemption, which encourages full compliance with the new system.

What types of fines will you be exempt from?
The Authority has identified six main types of fines covered by the initiative, which is a real opportunity to ease the financial burden on taxpayers. Let's take a detailed look at these types:

• Late Registration Fines: The taxpayer is exempted from the fines resulting from the delay in registration in any tax system once the required registration procedures are completed. 

• Late payment fines: In case of filing a tax return and late payment of the tax due, the late penalty will be waived upon payment of the principal amount of the tax amount. 

• Fines for Late Submission of Returns: The taxpayer is exempted from the fines resulting from the submission of tax returns after the specified dates when initiating their submission. 

• VAT return correction penalty: When an error is detected in a previous return and a VAT correction is filed, no penalty is imposed on the correction process. 

• Fines for field control violations for e-invoicing: These include violations that are monitored during inspection rounds related to e-invoicing, such as not issuing an e-invoice or not including a QR code in accordance with the legal requirements.

• Other General Provisions of VAT: Includes various VAT related violations that do not fall under the category of tax evasion, with the possibility of benefiting from exemption in accordance with the prescribed rules and conditions.

How to benefit from this initiative? To
benefit from this precious exemption, there are three simple and clear conditions that you must meet before June 30, 2026. Adhering to these terms is your key to taking full advantage of the initiative:

• Registration in the tax system: You must be registered with the Zakat, Tax and Customs Authority in the tax system that applies to you. If you are not registered, this is your golden opportunity to do so immediately during the validity period of the initiative.

• Submission of all late returns: The taxpayer must submit all the tax returns due to him for the previous periods. Your record must be fully up to date with the Authority, and no period is left unacknowledged.

• Principal Tax Payment: You must pay the full principal tax amount. If the amount is large and you cannot pay it in one go, don't worry, you can apply for the amount in installments, which we will talk about in detail in the next point.

Can I pay the amount in installments?
Yes, absolutely! The Authority understands that some companies may have difficulty paying their accumulated taxes in one go. Therefore, the Authority has made available the installment option, which is a very flexible and important solution.
If you want to benefit from the installments, you must submit a formal application to the Authority during the validity of the initiative, i.e. before the end of the initiative on June 30, 2026. The Authority will study your application and determine a suitable installment plan for you. But remember, you must fully commit to paying for the installments on time, as any delay in paying one installment may result in the cancellation of the exemption and the return of fines, and thus you will lose the benefit of the initiative. So, be very careful to stick to the installment plan.

 Are there fines that are not covered by the initiative?
Although the initiative is comprehensive, there are some cases that it does not include. There are two main cases that are not covered by this initiative:

• Tax evasion fines: If the fine is the result of a deliberate attempt to evade tax payments or conceal information, you will not be exempt from them. The initiative aims to help taxpayers who are late or make a mistake in good faith, not evaders.

• Fines already paid: If you paid a penalty before the start of this initiative, i.e. before January 1 , 2026, this amount will not be refunded. The initiative does not apply retroactively to payments.

Therefore, it is very important to review your tax situation carefully, and if you are unsure, it is best to consult with a certified public accountant before making any decisions regarding repayment.

Practical steps to take advantage of the initiative
If you want to take advantage of this valuable opportunity, follow these simple and straightforward steps to ensure you receive the exemptions you deserve:

• Log in to your account on the ZATCA portal: Log in to the ZATCA e-portal.

• Make sure you are registered with tax systems: Verify that your business is registered with the correct tax systems.

• Review your tax returns: Look for any late tax returns that you didn't fil.

• Submit all late returns: Fill out and submit all late returns via the portal. Make sure that all declarations are made without exception, as this is a prerequisite to benefit from the initiative.

• Determination of the total principle of the debt: After the returns are filed, the system will automatically calculate the total amount due. Distinguish between the tax principle, the amount to be paid, and the amount of fines you will be exempt from.

• Pay or installment: You have two options here: either you pay the tax principal in one go, or if you are having difficulty, you can file an installment request for the amount due. Make sure to submit the installment request before June 30 , 2026.

• Follow-up Automatic Forgiveness: After paying off the principal of the debt or approving the installment plan, the Authority will automatically drop the exempted fines from your account in accordance with the initiative's controls.

• Keep receipts and records: Make sure to keep copies of your payment receipts, copies of the declarations you have filed, and the installment plan document if available. These documents are very important for your reference in case of any future queries or disagreements.

Example that shows how much real benefit
this initiative is, let's take a practical example that shows how much difference it can make to your financial situation:

Let's say you have a small business, and you have accumulated taxes of SAR 50,000. Due to late payments and filing of returns, you were fined an additional SAR 100,000.

• Without the initiative: In this case, you will have to pay a total amount of SAR 150,000 SAR 50,000 principal tax + SAR 100,000 fines.

• With the benefit of the initiative: You will be exempted from the entire amount of SAR 100,000! You will only have to pay the SAR 50,000 principal tax. Even better, you can even pay this amount for installments if the Authority approves your installment request.

As you can see, the interest is very high, and it saves you a lot of money that would have gone as fines. These savings can be used by a company to develop its business, pay off other debts, or even as a cash reserve to meet future challenges.

Don't miss the opportunity!
The Fine Cancellation Initiative, which runs until June 30, 2026, is an irreplaceable opportunity to correct your financial and tax situation and start a new page with Zakat, Tax and Customs Authority. This initiative reflects DEWA's vision to support the business environment, stimulate voluntary compliance, and provide a helping hand to taxpayers to overcome challenges.
Don't hesitate to take advantage of this opportunity, and settle your affairs as soon as possible. The sooner you act, the more you will ensure that you take full advantage of the initiative and avoid any last-minute surprises. If you have any doubts or queries, you can always contact the Authority through their official channels available around the clock the unified number 19993, @Zatca_Care account on the X platform, info@zatca.gov.sa email, and the official website zatca.gov.sa, or consult a certified public accountant to help you arrange your paperwork and submit returns and applications correctly.

Remember, June 30, 2026 is the deadline! Don't let time pass and miss out on this precious opportunity that may not be repeated in such magnitude and comprehensiveness. Get started today to ensure a more stable financial future for your business.