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March 31, 2023
Saudi Arabia amends Implementing Regulations on excise tax
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.
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:
Highlights of the amendments
Key takeaways from the amendments include:
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