Saudi Arabia uses the Harmonized Commodity Description and Coding System for tariff classification purposes. Saudi Arabia has signed various trade agreements (especially with the Gulf Cooperation Council – GCC) that allow the member countries total exemption of the customs duties. As a member of the GCC, it applies the GCC common external tariff of at least five percent to be levied on most goods imported from countries outside the GCC. Customs duties are calculated Ad valorem on the C.I.F value. Saudi Arabia adheres to the WTO Customs Valuation Agreement (Article VII of the GATT), which stipulates the methods for the determination of customs valuation. Imports are subject to a customs surcharge, port fees, cargo service fees, and an import inspection tax.
The Zakat, the tax and customs authority, released its amended Harmonized Tariff Schedule to increase various customs duty rates effective June 2020. While the increases are still within established World Trade Organization ceilings, certain rates have been increased by up to 25 percent. In July 2020, the Saudi Arabian Government also increased the value added tax (VAT) rate from five to 15 percent.
Saudi Arabia also joins its Gulf Cooperation Council (GCC) neighbors in levying excise taxes on cigarettes (at a rate of 100 percent), carbonated drinks (at a rate of 50 percent), and energy drinks (at a rate of 100 percent).
The Saudi Standards, Metrology and Quality Organization (SASO) is the regulatory authority that controls quality of goods imported into Saudi Arabia. A conformity certificate is required to ensure all imported goods conform with Saudi standards. Suppliers looking to export products to Saudi Arabia are required to do so through Saudi Arabia’s Saleem product safety program that includes Saber, an electronic portal used to register both regulated and unregulated products with the required shipping documents. The portal can only be accessed by importers, SASO-approved certification bodies and Saudi customs officials. The Saleem Saber conformity process can be complicated and can lead to unnecessary charges if completed incorrectly. It is best to use an authorized certification body to assist with this process. A list of SASO approved certification bodies can be found at https://saber.sa/home/cborganizations.
Import Tariffs on Food/Agricultural Products
Saudi Arabia imports over $1 billion worth of U.S. agricultural products annually, making it among the top 20 U.S. agricultural export markets. The majority of food products are subject to a 10 to 15 percent import duty. Selected processed food products, however, are assessed higher import duties. In order to protect local food processors and production from competitively priced imports, Saudi Arabia ties import duties to the level of local production of similar products. As a general rule, a maximum import tariff rate of 40 percent ad-valorem is applied when local production of a food or agricultural product exceeds a self-sufficiency level. Imports of rice, baby milk and animal feed (soybean meal, feed corn, barley, rice, sorghum, palm kernel meal, wheat bran, alfalfa, hay, sugarcane molasses, rice bran, and sunflower meal, oats, canola meal, fish meal, alfalfa pellets, soybean hulls, sunflower hulls, and rice bran) are subsidized while coffee, tea and fresh red meat enter the country duty-free. Saudi Arabia has no tariff rate quota requirement.
In April 2017, the country began levying a 50 percent excise tax on soft drinks and a 100 percent tax on cigarettes, tobacco products, and energy drinks. In June 2020, Saudi Arabia imposed higher tariffs on a wide range of food and non-food products. Dairy products account for approximately 84 percent of the 224 food and agriculture products whose tariffs were increased.