TME Services

ZATCA Extends Fines and Penalties Exemption to June 20246 min read

Author: Derya Bandak
Managing Partner Attorney at German Law

The Zakat, Tax and Customs Authority (ZATCA) has extended its “Cancellation of Fines and Exemption of Penalties” initiative until 30.06.2024, to support businesses and individuals affected by the COVID-19 pandemic. Initially set to end on 31.12.2023, this initiative aims to provide financial relief to taxpayers meeting the specified requirements.

ZATCA has extended the initiative to help taxpayers mitigate the impact of the ongoing global health crisis. Businesses are still struggling to navigate the economic uncertainties brought about by the pandemic, and this extension provides a crucial lifeline for those facing fines related to tax compliance.

Penalties Covered by the Exemption

The fines covered by the exemption decision include:

– Penalties for late registration

– Late payment

– Delayed filing of returns

– Fines for correcting VAT returns

The initiative also covers penalties associated with violations of VAT field control, particularly those related to implementing e-invoicing regulations and other general regulations.

Registry Process

Taxpayers must be registered with the tax authority under the tax law to be eligible for this relief and submit all previously unfiled returns to ZATCA. Additionally, settling the principal tax debt linked to these returns is a prerequisite for eligibility. Once the application is submitted and approved, taxpayers may request an installment payment plan from ZATCA to make the process easier. At the same time, the initiative is still active, and all specified installments are paid on time.

It is essential to note that the initiative excludes penalties related to tax evasion violations and fines paid before its effective date.

How TME Services Can Support Your Business

The extension of ZATCA’s “Cancellation of Fines and Exemption of Penalties” initiative until 30.06.2024, provides much-needed relief for taxpayers grappling with the economic fallout of the ongoing pandemic. This measure not only eases immediate financial burdens by waiving fines but also enables businesses and individuals to redirect resources strategically. The inclusive nature of the initiative and the option for installment payment plans further enhance its positive impact, offering a clear pathway to financial recovery and fostering resilience in the face of economic uncertainties.

TME Services is a team of 45 professionals in legal-, tax-, accounting and compliance with over 18 years of experience. We advised a significant number of SMEs in the context of the implementation of the tax framework in the UAE and KSA over the last decade to make sure that our clients are well-oriented in the new and fast-evolving tax landscape and to reduce the legal liability of managers which may arise in connection with non-compliance.


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