On February 26, 2025, news broke that the General Authority of Zakat and Tax (GAZT) in Saudi Arabia had announced an extension of the VAT penalty waiver policy until June 30, 2025. This exemption covers penalties for failures such as not registering for VAT on time, delayed tax payments, late filings and corrections, and violations related to electronic invoice inspections. However, it does not apply to cases of willful tax evasion, false declarations, and other serious violations.
The extension of this policy provides an important window period for enterprises, particularly cross-border e-commerce firms, to adjust their tax compliance practices. During this time, businesses can take steps to ensure they meet VAT registration requirements, file accurate and timely returns, and adhere to electronic invoicing regulations. This window period serves as an opportunity for enterprises to review and enhance their tax compliance systems, thereby avoiding potential penalties and maintaining good standing with the Saudi tax authorities.
