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June 24, 2022
2022-0986

Saudi Arabia increases customs duties on certain goods

Executive summary

On 12 June 2022, the Kingdom of Saudi Arabia (Saudi Arabia) Finance Minister and Chairman of the Zakat, Tax and Customs Authority (ZATCA) issued Decision No. 59334 (Decision) approving the increase of customs duties on a range of products. The increase in customs duties is intended to encourage and protect national industries and local agricultural products. The Decision was published in the Official Gazette on 12 June 2022 and came into effect on the same day.

Detailed discussion

Prior to the Decision, the products which are affected by the increase of customs duties were subjected to customs duties ranging from 0% to 20%. The Decision mandating the increase of customs duties on these goods imported into Saudi Arabia was issued in response to the request by the Ministry of Industry and Mineral Resources and the Ministry of Environment Water and Agriculture, to protect national industries.

The new customs duties range from 6% to 25% and will impact 99 Harmonized System (HS) codes covering an extensive range of products. Further details can be found on Umm Al-Qura website, accessed through this link (only the Arabic version is currently available).

The main categories of goods that are subject to an increase in customs duties include:

  • Live animals
  • Fish
  • Foodstuffs
  • Organic chemicals
  • Mineral products
  • Plastics and plastic articles
  • Glass and glassware products
  • Aluminum products
  • Machinery and mechanical appliances
  • Vehicles

Implications

In light of the new tariff changes in Saudi Arabia, companies involved in the import and export of goods should evaluate the impact of the new tariff rates on their supply chain, as applicable. In addition, such companies should review and declare the accurate HS codes while importing the affected goods for duty payments in compliance with the Decision.

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For additional information with respect to this alert, please contact the following:

EY Consulting LLC, Dubai

Ernst & Young Professional Services, Al Khobar

Ernst & Young Professional Services, Riyadh

Ernst & Young LLP (United States), Middle East Tax Desk, New York

 

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