ZATCA has now extended its fines-waiver initiative twice in 2026 — first through 30 June, then again through 31 December 2026. If your business has unpaid tax penalties sitting on the books from a late VAT return, a missed registration deadline, or a delayed CIT payment, this initiative is the cheapest and simplest route to clearing them. Most businesses that qualify never actually apply, either because they don’t know the initiative exists or assume it only covers VAT.
It covers more than VAT. Here’s exactly what’s included, what isn’t, and what you need to do before the window closes.
What the Initiative Actually Waives
The initiative waives fines — not the underlying tax itself. If you owe SAR 50,000 in unpaid VAT plus a late-payment penalty on top, the initiative can eliminate the penalty, but the SAR 50,000 in principal tax still has to be paid. That distinction is the single most common misunderstanding businesses have about this program.
The fines covered are specifically those for late registration, late payment, and late filing of returns. It applies across five tax systems: Excise Tax, Value Added Tax, Real Estate Transaction Tax, Withholding Tax, and Corporate Income Tax. Zakat is not included, since Zakat sits outside ZATCA’s tax-penalty framework and is administered under its own separate mechanism.
The waiver initiative was first extended for six months from 1 January 2026 through 30 June 2026. ZATCA then announced a further six-month extension on 29 June 2026, running from 1 July through 31 December 2026. Businesses should treat this latest date as the operative deadline, not the earlier one.
Who Qualifies
To benefit, a taxpayer must meet three conditions:
- Be registered with ZATCA under the relevant tax system
- Have filed all required tax returns for the periods in question — you cannot waive a fine on a return you haven’t even submitted
- Pay the full principal tax liability due, either in one payment or through an approved installment plan, within the initiative’s active window
A business that registered late, never filed the missed periods, and still owes the underlying tax does not qualify by simply requesting the waiver — filing first is a precondition, not an afterthought.
What’s Excluded
The initiative does not touch penalties arising from tax evasion. ZATCA defines this to include deliberate non-disclosure of taxable transactions, fraudulent reporting, and intentional suppression of revenue. If ZATCA characterizes an underpayment as evasion rather than an administrative lapse, the waiver does not apply — and businesses that have been under-reporting deliberately should not read this initiative as a route to retroactively clean that up penalty-free.
The distinction ZATCA draws is between a business that was late or made an honest filing error, and one that concealed a liability. The former is exactly who this initiative is built for.
A Worked Example
A Jeddah retailer failed to file VAT returns for three quarters in 2025, accumulating SAR 30,000 in unpaid VAT and a further SAR 6,000 in late-filing and late-payment penalties under ZATCA’s standard fine schedule. To use the waiver initiative before 31 December 2026, the retailer must first submit the three overdue VAT returns, then pay the SAR 30,000 principal VAT in full (or under an approved installment arrangement). Once both steps are complete, ZATCA waives the SAR 6,000 in penalties — the retailer’s net cost is limited to the tax that was always owed.
How to Use It Before December
There is no separate “application” to file for the waiver itself — it applies automatically once you satisfy the three conditions above, by filing the outstanding returns and settling the principal tax through ZATCA’s e-services portal. The practical risk is timing: if outstanding filings are complex or span multiple periods, resolving them close to the 31 December 2026 deadline leaves no margin if a return is rejected or needs correction.
Businesses carrying any unresolved late-filing or late-payment exposure across VAT, RETT, WHT, CIT, or Excise Tax should treat this as a fixed-cost cleanup opportunity with a hard expiry date, not an open-ended option.
Frequently Asked Questions
It waives penalties for late registration, late payment, and late filing of returns across Excise Tax, VAT, RETT, Withholding Tax, and Corporate Income Tax. It does not waive the underlying tax owed — only the fines charged on top of it.
The initiative was extended for a further six months on 29 June 2026, running through 31 December 2026. An earlier extension had covered 1 January to 30 June 2026.
No. Zakat is administered separately from ZATCA’s tax-penalty framework and is not included in this initiative, which covers Excise Tax, VAT, RETT, WHT, and CIT only.
Yes. You must pay the full principal tax liability — either in one payment or through an approved installment plan — and have filed all required returns for the periods concerned. The waiver only removes the penalty, not the tax itself.
No. Penalties linked to deliberate non-disclosure, fraudulent reporting, or intentional suppression of taxable transactions are excluded. The initiative is intended for administrative lateness and filing errors, not concealment.
There is no standalone application. The waiver is applied once you file all outstanding returns and settle the principal tax due through ZATCA’s e-services portal within the initiative’s active window.
- ZATCA’s fines waiver initiative now runs through 31 December 2026, following a second six-month extension announced 29 June 2026.
- It covers late registration, late payment, and late filing penalties across VAT, RETT, WHT, CIT, and Excise Tax — Zakat is excluded.
- The waiver removes only the fine, not the underlying tax owed, which must be paid in full or under an approved installment plan.
- Qualifying requires filing all outstanding returns first — you cannot request a waiver on a return that hasn’t been submitted.
- Penalties tied to deliberate tax evasion are explicitly excluded from the initiative.
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This article is based on ZATCA’s published announcements extending the fines and financial penalties waiver initiative, most recently through 31 December 2026. Eligibility and process details are set by ZATCA and may change; confirm your specific position directly with ZATCA or a licensed advisor before relying on this article for a live filing. dariba.co is an independent platform with no consulting relationships.