Rules:15% Vat for Goods Imported through Customs - Saudi VAT

    6 months ago


Rules:15% Vat for Goods Imported through Customs - Saudi VAT

Goods imported into the Kingdom through Saudi Customs on or after 1 July 2020 will be subject to the revised rate of VAT at 15%.

For customs purposes, import means any importation transaction for which a customs declaration has been made and whose goods and cargo have been cleared from the customs port (sea, land, or air). If the customs declaration was created before 1 July 2020 with the arrival and clearance of goods and cargo to the port before that date, VAT at 5% will be applied to those shipments even if the cargo was cleared after that date.

Conversely, if a customs declaration was created before 1 July 2020 but the goods and cargo have been cleared from the customs port on or after that date, VAT at the revised rate of 15% will be applied. Likewise, the revised VAT rate of 15% applies to all shipments for which a customs clearance is on or after 1 July 2020.

Example 1: Ahmed purchased a book online from the USA on 1 May 2020 for SAR 75 and SAR 10 delivery, with the payment for the book, shipment, and taxes due on a Cash on Delivery basis. Due to delays in shipments from the US during this period, the book did not arrive in KSA until 3 July 2020 and to be cleared after that date. As the actual importation occurred after the effective date of the revised VAT rate, Saudi Customs will calculate the VAT payable at 15% on the customs value of SAR 85. VAT will be SAR 12.75.

 

Example 2: A company has arranged to import a shipment of raw materials from outside the Kingdom and on 22 June 2020 the company created a customs declaration in advance and paid the Tax and fees due thereon before the shipment arrived. On 27 June 2020 the shipment arrived at Jeddah Port and was cleared after the completion of all customs procedures on 30 June 2020. Saudi Customs will calculate the Tax according to the standard rate of 5%, because the goods have been cleared before the effective date of the revised VAT rate, as the import event has been achieved before the effective date of the revised rate (custom clearance of the goods from the customs port).

 

 


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