Saudi Customs System and Its Impact on Businesses

The Saudi Zakat, Tax and Customs Authority has announced the establishment of Saudi customs duties for goods, aimed at enhancing the state's financial revenues. The fees are set at fixed rates according to the different types of goods and products, which the owner of the goods must pay when these items exit the country's borders. In the following lines, we can clarify more details.

Customs Duty System in Saudi Arabia

The Saudi Customs Authority always strives to issue clear decisions that make transactions for traders and importers easier and more flexible, while considering the interests of the state and enhancing its revenues. Decisions are made with transparency and high accuracy. Therefore, it has announced the establishment of customs duties, clarifying that the tax rates vary according to several factors, as follows:

A customs duty of up to 15% has been set on all types of fresh vegetables imported from abroad.
A customs duty of approximately 15% has been applied to household goods, which was previously set at only 5%.
A customs duty of around 15% has also been imposed on cars and related spare parts, such as oil tanks and brakes.
Customs duties ranging from 2-15% have been designated for imported meats.
Duties range from 0-15% on dairy products, bathtubs, pipes, iron, cosmetics, fruit and candy packaging, refrigeration devices, granite, and marble."

How are customs duties calculated on goods?

After understanding the customs duty rates set by the responsible authority, you can calculate the applicable duties on your goods based on the type of items and products. This can be done using a simple mathematical formula:

Customs Duty Value = (Customs Duty Rate × Total Customs Value of Goods) + (Value Added Tax Rate × Total Customs Value of Goods).

Goods Exempt from Saudi Customs Duties

The Saudi customs duty system does include exceptions, and the Customs Authority has clarified certain cases in which the owner of the goods is not required to pay the applicable duties. These cases are as follows:

If the goods are personal use items.
If the value of the goods is less than 3,000 Saudi Riyals.
If the quantity is small and cannot be sold in markets.
When the goods are not listed among the prohibited items in Saudi customs regulations.

If the goods are personal use items. If the value of the goods is less than 3,000 Saudi Riyals. If the quantity is small and cannot be sold in markets. When the goods are not listed among the prohibited items in Saudi customs regulations.

Impact of Saudi Customs Duties on Businesses

Saudi customs duties impact both individuals and businesses, but the effect of increased duties is more pronounced on companies. An increase in duties leads to higher product prices, prompting many consumers to shift towards local products to save money.

It’s important to note that customs duties also affect parties involved in the supply chain, such as importers, retailers, manufacturers, and many others, creating a difference in the profitability aspects of a business or company.

The objectives behind implementing customs duties on a broad scale are numerous, but the primary reason, after strengthening the country's economy, is to protect local goods from foreign competition. Therefore, don’t hesitate to subscribe to one of the Wazen packages that suit you and start managing your business successfully, while focusing on international customs policies to ensure a smooth and comfortable experience.

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