
EXCISE TAX
ADVISORY
SERVICES IN
SAUDI ARABIA
Our Excise Tax advisory service in Saudi Arabia is part of our tax consultancy services in Saudi Arabia.
Excise Tax is an indirect tax set on specific goods; it is imposed within government policies rather than being an international tax imposed across countries. It is primarily considered as a business tax; a tax paid by the businesses; producers, importers, or an intermediary; and not by the consumer although it usually induces an indirect increase in price for consumers. It can be set and paid as a fixed percentage rate assessed on the value of certain goods referred to as “ad valorem” or as a specific fixed amount.
Excise Tax is typically imposed in the country where and at the time when the Excise goods are consumed; applied on the retail price affecting the price of the excisable goods for final consumers; thus, referred to as a consumption tax.
WHO IS EXEMPT FROM PAYING EXCISE TAX?
- Diplomatic and consular bodies, international organisations, and heads and members of diplomatic and consular corporations.
- Excise goods brought in by travellers entering the country provided that these goods are of non-commercial use, and they are within the allowance specified in the Customs Law.
- Excise goods sold in departures Duty-free shops and onboard consumption.
TYPES OF EXCISE GOODS IN SAUDI ARABIA
- Tobacco related products.
- Soft drinks.
- Energy drinks.
- Sweetened drinks.
- Electronic devices and tools related to smoking, vaping and similar activities.
- Liquid consumed in electronic devices used in smoking, vaping and similar activities.
WHAT IS THE EXCISE TAX RATE IN KSA?
Excise Tax was introduced in KSA on 11 June 2017, the implementation and administration of Excise Tax is under the authority of Zakat, Tax, and Customs Authority (ZATCA) in KSA. For some excise goods, ZATCA specifies the minimum value to be applied.
The Excise Tax is set on an ad valorem basis as shown in the following table:
The Excise Tax rate is levied on the value of the excise good which is known as the Tax base. The Tax base is determined by comparing the Retail Sale Price of the good at the time of sale to the consumer and the Standard Price (minimum price) of the good as agreed and set periodically by the GCC Tax Authorities. The Tax base will refer to the price of higher value.
DISCLOSURE OF EXCISE TAX AND PAYMENT
An Excise Tax payment is submitted online along with providing the following information: the Category of the Excise good, description and brand, unit of measure, quantity of goods, and the Retail Sales Price per unit of measure. SADAD will provide the amount of Excise Tax due, which need to be paid within 45 days from the date of which the Excise Tax has become due.
VIOLATION OF DISCLOSURE OF EXCISE TAX
Penalties are imposed for failure to comply with ZATCA Excise Tax regulations, including the following: