Saudi Arabia Extends Fines Exemption Initiative Through June 2026

The Zakat, Tax and Customs Authority (ZATCA) announced on January 2, 2026, that it is extending its "Fines Exemption Initiative." This extension provides businesses with a continued grace period to align with e-invoicing regulations without incurring financial penalties.

Six-Month Grace Period for Compliance

The initiative, originally set to expire, has been officially extended until the end of June 2026. This decision reflects ZATCA's commitment to a smooth transition for taxpayers as the country progresses through its phased rollout of mandatory electronic invoicing.

The exemption covers specific fines related to non-compliance with VAT and e-invoicing procedural requirements. By prolonging this period, the Authority aims to mitigate the burden on businesses that are still in the process of integrating their technical solutions with the Fatoora platform.

Context of Ongoing Waves

This extension comes at a critical time when new taxpayer waves are actively being onboarded. With the rollout of taxpayer waves still incomplete, and recent announcements defining the criteria for Wave 23 (deadline March 2026) and Wave 24 (deadline June 2026), the extended exemption aligns perfectly with the current compliance schedule. It offers a safety net for entities navigating the complexities of the "Integration Phase."

Not a License to Delay

While the extension offers relief, ZATCA has clarified that it should not be interpreted as permission to postpone compliance efforts.

• Active Obligations: Taxpayers who are already subject to e-invoicing mandates are expected to continue addressing and resolving any system malfunctions immediately.
• Technical Readiness: The grace period is intended to resolve technical roadblocks, not to delay the start of implementation projects.

Businesses are strongly advised to review the updated simplified guidelines available on ZATCA’s official channels to understand exactly which penalties are covered and under what conditions the exemption applies.

The exemption applies to procedural errors and late filings, provided they are voluntarily corrected, but does not cover cases of tax evasion.

There’s more you should know about e-invoicing in Saudi Arabia – learn more about the new and upcoming regulations.