Saudi Arabia: Penalty waiver extended for late-filed tax returns, late tax payments (COVID-19)

Saudi Arabia: Penalty waiver extended

The Minister of Finance issued Ministerial Resolution no. 2303 (21 January 2021) to extend the waiver of penalties for all late tax return filings and late tax payments until June 2021—part of the effort to mitigate the impact of the coronavirus (COVID-19) pandemic on economic activities.

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The resolution outlines new tax penalty-waiver rates. In general, penalties will be waived at different percentage rates based on the timing of payment of the tax liability owed to the General Authority of Zakat and Tax (GAZT).


New tax penalty-waiver mechanism

The relief is applicable to penalties arising from late filing of tax returns and late payment of taxes that were due before 21 January 2021. Penalties arising from assessments or reassessments of returns and payments may also be part of this initiative.

The relief is limited to tax penalties for the late payment, late filing, and value added tax (VAT) declaration amendments. To benefit from this penalty relief, taxpayers must pay the tax liability in full.

The percentage of tax penalty waived is directly linked to the date when payment of the tax liability is made (as noted in the following table):
 

Payment date

Percentage of penalty waiver

Payment in full before 21 January 2021

100%

Payment made between January and end of March 2021

100%

Payment made between April and end of May 2021

75%

Payment made by June 2021

50%


Exclusions from amnesty

The resolution clarifies that the tax penalty waiver does not include a waiver of penalties incurred due to tax evasion.

The penalty relief also does not apply to penalties other than those mentioned in the resolution. Tax penalties that have been paid to GAZT before the release of this resolution are not subject to this relief initiative.


For more information, contact KPMG’s Global Head of International Tax:

Rodney Lawrence | +1 (312) 665 5137 | rlawrence@kpmg.com

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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