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March 31, 2023

Saudi Arabia amends Implementing Regulations on excise tax

  • Saudi Arabia has amended provisions of the Excise Tax Implementing Regulations related to excise tax procedures, such as refunds and postponement of excise tax payments on imports and audits.

  • The amendments were published in Arabic and are effective as of 24 February 2023.

Executive summary

On 24 February 2023, the ZATCA Council Decision No. 13-1-23 dated 15/07/1444H (Decision) was published in the Official Gazette. The Decision amends certain provisions of the Implementing Regulations on excise tax regarding postponement of payment of excise tax due on imports, the disposal of nonconsumable goods that are subject to the excise tax (excise goods), the refund of excise tax paid on goods that became nonconsumable, and audit procedures.

Detailed discussion


Saudi Arabia issued Royal Decree No. (M/86) dated 27/8/1438 AH, the Excise Tax Law (Law), which became effective on 11 June 2017 under the Common Excise Tax Agreement of the Gulf Cooperation Council States. The Law is intended to discourage and reduce the consumption of certain goods considered harmful to human health.

Currently, the following goods are subject to excise tax:

  • Tobacco products (100%)
  • Soft drinks (50%)
  • Energy drinks (100%)  
  • Sweetened beverages (50%)
  • Electronic smoking appliances and tools (100%)
  • Liquids used in electronic smoking appliances and tools (100%)

Highlights of the amendments

Key takeaways from the amendments include:

  • As an exception to the conditions mentioned in paragraph 2 of Article 18 of the Excise Tax Implementing Regulations, the Governor may approve a request to delay the payment of excise tax by a period not exceeding 45 days.
  • The amendments add a new Article 37, which introduces definitions and conditions to be fulfilled for a place to be designated for the disposal of nonconsumable excise goods.
  • The amendments introduce a new paragraph to Article 52, establishing the right for refund of paid excise tax on excise goods that are put into circulation and that are or become nonconsumable. Article 52 also details the conditions that must be met for the taxpayer to be granted a refund.


Taxpayers registered for excise tax purposes in Saudi Arabia should observe the new procedures introduced by the amendment to the Implementing Regulations on excise tax as they have direct implications on the payment of excise tax due on imported excise goods, disposal processes and the ability to claim refunds from the ZATCA over nonconsumables. Such taxpayers should undertake the appropriate steps to comply with the new requirements and assess potential opportunities for optimization.


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

EY Consulting LLC, Dubai

EY LLP (United States), Middle East Tax Desk, New York


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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