Tax News Update    Email this document    Print this document  

Executive summary

On 6 September 2024, the Board of Directors of the Zakat, Tax and Customs Authority (ZATCA) issued Resolution No. (03-03-24) dated 18/10/1445 AH (Resolution) regarding the new fee structure for customs services. On the same day, the ZATCA announced the issuance of the Resolution on its website.

The new fee structure includes waiving export customs service fees and introducing a new mechanism for calculating import customs service fees with minimum and maximum fee caps, in addition to a special provision for e-commerce.

The Resolution stipulating the fee rules on customs services will come into effect on 6 October 2024, with the aim to facilitate trade, improve transparency and openness for the trade community, increase trader trust levels, and alleviate additional financial burdens for exporters and importers.

Detailed discussion

Background

As part of its commitment to establish Saudi Arabia as a global logistics hub in line with Vision 2030¹ and to align with its strategic objectives and worldwide best practices, the ZATCA is revamping its customs service fees and rules.

In February 2024, a draft resolution proposed by the ZATCA on customs service fees was opened for public consultation on the public consultation platform. The document aimed to clarify the customs service fees imposed by the ZATCA and the conditions to be fulfilled. The Resolution sets out the new fee structure for customs services.

Highlights of the Resolution

The Resolution covers the following main points:

• Waiver of export service fees: The Resolution provides waiver of fees for all customs services related to exports, including customs declaration processing services, lead seals, land port loading services, X-ray inspection, customs data exchange and sample analysis exchange at specialized laboratories. The waiver of these fees aims to encourage exports, alleviate financial burdens, particularly for SMEs, and enhance the competitiveness of Saudi exports.
• Reduction of import service fees using a new mechanism for calculating import service fees: The Resolution imposes a new fee structure of 0.15% of the value of the incoming goods for customs purposes per customs declaration, including insurance and freight. The new fee structure sets a maximum 500 Saudi Riyal (SAR500) and a minimum SAR15 fee on imports, with a special cap of SAR130 for shipments exempt from customs duties and taxes. In instances of consolidated declarations, the fees should be applied separately for each bill of lading.
  The new structure fee of 0.15% applicable on the goods' import value shall be payable on goods that have been cleared for final import and shall not be payable on goods to be re-exported or goods under customs duty suspension or customs duty deferral status. Before the Resolution was issued, the customs service fees for imports amounted to SAR220, bifurcated into a flat rate of SAR100 for each container inspected by X-rays, an additional SAR100 for "information exchange services" and SAR20 for customs declaration processing services.
  The new mechanism for calculating import service fees aims to reduce importer costs and enable them to pre-calculate customs service fees more accurately, with a higher limit set for such fees. Moreover, it unifies the fee calculation mechanism across various ports of entry, whether it be land, sea or air, and supports trade facilitation objectives.
• A special provision for e-commerce: The Resolution imposes a flat fee of SAR15 on individual e-commerce shipments valued at SAR1,000 or less.

Implications

Importers, exporters and e-commerce business owners should familiarize themselves with the new fee rules to facilitate compliance and asses any benefit from the potential cost reductions. Businesses should also consider the implications of incorrectly or inaccurately declaring the value of incoming goods due to miscalculating the applicable import customs service fees.