Saudi Tax & Zakat Guide 2025: Amnesty Extended, New Regulations, and E-Invoicing Deadlines

For business owners and finance managers in Saudi Arabia, 2025 is a year of significant opportunity and strict deadlines.

The regulatory landscape has shifted. ZATCA has offered a generous extension to the Cancellation of Fines Initiative, giving businesses a final window to correct past mistakes without penalty. Simultaneously, the Phase 2 E-invoicing rollout has accelerated, now affecting smaller enterprises with revenues as low as 1 Million SAR by the end of the year.

1.The "Golden Opportunity": Tax Amnesty Extended to Dec 31, 2025

In a major relief for taxpayers, ZATCA has officially extended the Cancellation of Fines and Exemption of Financial Penalties Initiative until December 31, 2025.

If your business has outstanding tax returns, unpaid dues, or uncorrected errors from previous years, you can now resolve them without paying the usual heavy fines.

What is Exempted?

Late Registration Fines: For delaying registration in VAT, Real Estate Transaction Tax (RETT), or Income Tax.

Late Payment Fines: Penalties for failing to pay taxes by the statutory deadline.

Late Filing Fines: Penalties for submitting returns after the due date.

VAT Return Correction Fines: Penalties for amending previously incorrect VAT returns.

Field Violation Fines: Specific penalties related to VAT field inspections and e-invoicing violations.

How to Benefit: To qualify, you must be registered with ZATCA, submit all outstanding returns, and pay the principal tax amount due (or set up an approved installment plan) before December 31, 2025

2. E-Invoicing Phase 2: Is It Your Turn in 2025?

The "Integration Phase" (Phase 2) is no longer just for large corporations. Throughout 2025, ZATCA is rolling out Waves 13 through 22, targeting Small and Medium Enterprises (SMEs).

If your taxable revenue in 2022 or 2023 fell into these brackets, you must integrate your accounting software with the Fatoora portal by these dates:

Wave 13: Revenue > SAR 7 Million → Deadline: Jan 1, 2025

Wave 14: Revenue > SAR 5 Million → Deadline: Feb 1, 2025

Wave 15: Revenue > SAR 4 Million → Deadline: Mar 1, 2025

Wave 16: Revenue > SAR 3 Million → Deadline: Apr 1, 2025

Wave 22: Revenue > SAR 1 Million → Deadline: Dec 31, 2025

3. New Zakat Regulations (MR 1007): Critical for 2024 Filings

If your fiscal year started on or after January 1, 2024, your upcoming Zakat filing in 2025 will be governed by the new Executive Regulations for Zakat Collection (MR 1007).

Key Changes You Must Know:

Year-End Balances: The Zakat base is now calculated strictly using the closing balances of assets and liabilities at the end of the year, reducing ambiguity.

Projects Under Construction: A major win for real estate and construction firms—properties under construction intended for sale can now be deducted from the Zakat base (subject to specific conditions).

Employee Housing: Housing owned by the company for employee use is clearly deductible from the Zakat base.

Conclusion: Act Before the Deadlines

2025 offers a unique mix of leniency (the Amnesty) and strictness (E-invoicing enforcement). The smartest move is to audit your position today:

Check your historical filings: Is there anything you need to correct under the Amnesty?

Check your revenue: Which E-invoicing wave applies to you?

Prepare for MR 1007: Ensure your accountant is using the new Zakat calculation formulas.

Need help navigating these changes? Contact Lumen Audit & Advisory today. Our team specializes in Zakat, Tax, and E-invoicing compliance to keep your business secure and growing.