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Saudi Arabia issues resolution amending customs duties on certain goods
- Saudi Arabia has issued a resolution amending customs duties on certain goods according to the World Trade Organization ceilings to which Saudi Arabia has committed.
- These amendments are intended to protect and encourage national industries and transactions involving local agricultural products in Saudi Arabia.
- Companies that deal with imports into Saudi Arabia should review and comply with the revised customs duty rates.
Executive summary
On 15 July 2024, Saudi Arabia's Finance Minister and Chairman of the Zakat, Tax and Customs Authority (ZATCA) issued Minister of Finance Resolution No. (1-88-1446) (Resolution), amending the customs duty rates applicable to certain goods, for the purpose of protecting and encouraging national industries and transactions involving local agricultural products. The Resolution was published in the Official Gazette and the amendments entered into force on 16 July 2024.
Detailed discussion
Background
The Resolution was issued in response to a request from the Ministry of Industry and Mineral Resources to raise customs duty rates for certain goods to protect and encourage national industries and transactions involving local agricultural products in Saudi Arabia.
Details of the amendments
The amendments are consistent with the maximum duty rates to which Saudi Arabia has committed as a member of the World Trade Organization (WTO). The customs duty rates applicable to the three types of electrical products, as indicated in the table below, have been increased from 5% to 15%:
SRL
|
HS Code |
Description
|
Current duty rate |
New duty rate |
1 |
85352100
|
For a voltage of less than 72.5 kV |
5% |
15% |
2 | 85352900 | Other (from self-propelled circuit breakers with a voltage greater than 72.5 kV)/electrical machinery and equipment | 5% | 15% |
3
|
85364900
|
Other ("relays" with voltages over 60V)/electrical machinery and equipment |
5%
|
15%
|
Implications
The amendments are anticipated to have significant implications for importers in Saudi Arabia who are involved with the specified goods, potentially influencing market dynamics and trade flows. Domestic producers may benefit from increased protection, potentially leading to greater market share within Saudi Arabia.
Businesses in Saudi Arabia, engaged in the import of the specified goods, should review the new customs duty rates and conduct an impact assessment to quantify the financial impact of this increase on their overall supply chain costs.
For additional information concerning this Alert, please contact:EY Consulting LLC, Dubai
EY Consulting LLC, Doha
Ernst & Young Professional Services (Professional LLC), Riyadh
Ernst & Young LLP (United States), Middle East Tax Desk, New York
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Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
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