ZATCA Issues New Customs Fee Rules to Boost Trade

The Zakat, Tax and Customs Authority (ZATCA) has issued a decision by its Board of Directors introducing new Fee Rules on Customs Services, which will take effect on 6 October 2024. The announcement, released via the Saudi Press Agency, outlines a comprehensive framework that waives fees for all customs services related to exports and reduces customs service fees for imports through a new calculation mechanism. The decision is designed to streamline trade procedures, reduce financial burdens on businesses, and enhance the efficiency and competitiveness of Saudi exports, aligning with the Kingdom’s Vision 2030 objectives to become a global logistics hub.

Context and Background

ZATCA, the government authority responsible for the assessment, collection, and administration of zakat, tax, and customs duties, has been actively reforming its customs procedures to facilitate trade and improve the business environment. The new Fee Rules on Customs Services represent a significant shift from the previous fee structure, which included fixed charges for various services. Under the old system, importers faced fees such as SAR 100 for each container inspected by X-ray, an additional SAR 100 for information exchange services, and SAR 20 for customs declaration processing. These fees could accumulate and create unpredictability for importers. The new decision aims to address these issues by introducing a transparent and uniform mechanism for calculating import service fees, while completely eliminating fees for export-related services. This move is part of ZATCA’s broader strategy to support Saudi Arabia’s economic diversification and trade facilitation goals.

Key Details

The decision includes several key provisions. For exports, all customs service fees are waived, covering services such as customs declaration processing, lead seal, land port loading, X-ray inspection, customs data exchange, and sample analysis exchange at specialized laboratories. For imports, the new mechanism calculates fees based on 0.15% of the value of incoming goods, including insurance and shipping, with a maximum fee of SAR 500, a minimum of SAR 15, and a special cap of SAR 130 for shipments exempt from customs duties and taxes. Additionally, for individuals’ shipments arriving through online stores, a flat fee of SAR 15 applies, provided the shipment value does not exceed SAR 1,000. ZATCA emphasized that the new system eliminates cost increases for importers and unifies the calculation mechanism across land, sea, and air ports. Importers can now pre-calculate customs service fees, enhancing transparency and predictability.

Implications and Impact

The waiver of export fees is expected to encourage exporters, particularly small and medium enterprises (SMEs), by alleviating financial burdens and boosting the competitiveness of Saudi exports in global markets. For imports, the new fee structure reduces overall costs and simplifies the calculation process, which should facilitate trade and improve the ease of doing business. The unification of fee calculations across different ports eliminates inconsistencies and supports seamless logistics operations. These measures align with ZATCA’s strategic objectives to provide customs services in line with best practices, enhance the logistics ecosystem, and promote confidence among importers and exporters. By reducing costs and improving transparency, the decision is likely to stimulate trade activity and contribute to Saudi Arabia’s economic growth.

Vision 2030 Alignment

This initiative directly supports Saudi Arabia’s Vision 2030, which aims to transform the Kingdom into a global logistics hub and diversify the economy away from oil dependence. By enhancing trade facilitation and reducing barriers for businesses, ZATCA is contributing to the development of a robust and competitive logistics sector. The new fee rules demonstrate the Kingdom’s commitment to creating a favorable business environment that attracts investment and fosters economic growth. As Saudi Arabia continues to implement reforms under Vision 2030, such measures will play a crucial role in achieving the goal of becoming one of the top 25 countries in the Logistics Performance Index and increasing the private sector’s contribution to GDP.

20 Questions

Q1. What is the purpose of the new Fee Rules on Customs Services?

A1. The new rules aim to streamline customs procedures, reduce financial burdens on businesses, and enhance the efficiency and competitiveness of Saudi exports. They also support trade facilitation and align with Vision 2030 goals to transform Saudi Arabia into a global logistics hub.

Q2. When will the new customs fee rules be implemented?

A2. The decision will be implemented on 6 October 2024. It was announced by the Zakat, Tax and Customs Authority (ZATCA) on September 6, 2024, via the Saudi Press Agency.

Q3. What are the main changes for export customs services?

A3. All customs service fees for exports are waived. This includes fees for customs declaration processing, lead seal, land port loading, X-ray inspection, customs data exchange, and sample analysis exchange at specialized laboratories.

Q4. How are import customs service fees calculated under the new rules?

A4. Import fees are calculated as 0.15% of the value of incoming goods, including insurance and shipping. There is a maximum fee of SAR 500 and a minimum of SAR 15, with a special cap of SAR 130 for shipments exempt from customs duties and taxes.

Q5. What was the previous fee structure for imports?

A5. Previously, importers paid SAR 100 for each container inspected by X-ray, an additional SAR 100 for information exchange services, and SAR 20 for customs declaration processing. These fixed fees could accumulate and were less predictable.

Q6. Are there special provisions for individual shipments from online stores?

A6. Yes, for individuals’ shipments arriving through online stores, a flat fee of SAR 15 applies for customs declaration processing, provided the value of the shipment does not exceed SAR 1,000.

Q7. How does the new decision benefit small and medium enterprises (SMEs)?

A7. The waiver of export fees alleviates financial burdens, especially for SMEs, making it easier for them to export and compete in international markets. This supports the growth and sustainability of SMEs in Saudi Arabia.

Q8. What are the strategic objectives of ZATCA behind this decision?

A8. ZATCA aims to provide customs services according to best practices, enhance the logistics ecosystem, boost the confidence of importers and exporters, and improve transparency. These objectives support Saudi Arabia’s Vision 2030.

Q9. How does this decision impact trade facilitation?

A9. The decision simplifies fee calculations and reduces costs, making trade processes more efficient. It unifies the calculation mechanism across land, sea, and air ports, eliminating inconsistencies and supporting seamless logistics.

Q10. Can importers pre-calculate customs service fees?

A10. Yes, the new mechanism allows importers to pre-calculate customs service fees based on the value of goods. This enhances predictability and helps businesses manage costs more effectively.

Q11. What is the maximum fee for import customs services?

A11. The maximum fee for import customs services is SAR 500 per shipment, based on 0.15% of the value of the goods. This cap provides certainty and prevents excessive charges for high-value shipments.

Q12. How does the decision support Saudi Arabia’s Vision 2030?

A12. By facilitating trade and reducing barriers, the decision contributes to transforming Saudi Arabia into a global logistics hub. It supports economic diversification and enhances the Kingdom’s competitiveness, key goals of Vision 2030.

Q13. What services are included in the export fee waiver?

A13. The waiver covers customs declaration processing, lead seal, land port loading services, X-ray inspection, customs data exchange, and sample analysis exchange at specialized laboratories.

Q14. How can customers contact ZATCA for inquiries?

A14. Customers can contact ZATCA via the unified 24/7 call center at 19993, through its X Account (@Zatca_Care), by email at [email protected], or via instant chatting on its website (zatca.gov.sa).

Q15. What is the minimum fee for import customs services?

A15. The minimum fee for import customs services is SAR 15. This applies to shipments where 0.15% of the value is less than SAR 15, ensuring a baseline fee for processing.

Q16. How does the new mechanism eliminate cost increases for importers?

A16. The new mechanism bases fees on a percentage of goods value with caps, replacing fixed fees that could accumulate. This prevents unexpected cost increases and provides a predictable fee structure.

Q17. What is the fee for customs declaration processing on individuals’ shipments?

A17. For individuals’ shipments arriving through online stores, the fee is SAR 15, provided the shipment value does not exceed SAR 1,000. This simplifies customs processing for small e-commerce shipments.

Q18. What are the benefits of unifying the calculation mechanism across ports?

A18. Unifying the mechanism ensures consistent fee application at land, sea, and air ports, reducing confusion and administrative burdens. It supports efficient trade flows and enhances the overall logistics environment.

Q19. How does the decision promote transparency in customs services?

A19. The decision clearly specifies fee calculations and caps, allowing importers and exporters to understand and predict costs. This transparency builds trust and improves the business environment.

Q20. What is ZATCA’s commitment regarding customs service development?

A20. ZATCA is committed to developing its customs services in line with strategic objectives, contributing to Saudi Arabia’s goal of becoming a global logistics hub and supporting Vision 2030 through continuous improvement and innovation.

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