The Saudi Arabian Cabinet approved the Excise Tax Law on 2 May 2017 after also approving the GCC framework agreement in relation to Excise Taxes. The Excise Tax Law was published in the Saudi Official Gazette (UM-AL QURA), Issue no. 4672 on 26 May 2017.  The Law will enter into force after 15 days from its publishing date.

The Excise Tax Executive regulation is expected to be issued soon to provide additional guidance to taxpayers on the procedures relating to this new tax and their responsibilities regarding registration and compliance. Businesses that perform any of the following activities will have to register for Excise Tax purposes, according to article 6 of the Excise Tax Law:

  • Import of excisable goods;
  • Production of excisable goods; or
  • Acquisition of excisable goods under duty suspension arrangements.

There is no detailed list of goods subject to Excise Tax in the Excise Tax Law, however, according to information published by the tax authority (GAZT) the following products are expected to be subject to Excise Tax in Saudi Arabia:

  • Tobacco products – 100%;
  • Carbonated soft drinks – 50%; and
  • Energy drinks – 100%.

Registration for Excise Tax purposes in the GAZT electronic filing system “ERAD” is possible and can be found using the following link:

https://www.gazt.gov.sa/irj/portal?ume.logon.locale=ar&login=X