ZATCA Allows Customs Duty Refunds as Saudi Arabia Clarifies GCC Origin of Goods

• Saudi Arabia Clarifies GCC Origin of Goods
• Allows Customs Duty Refunds for Goods Imported from GCC Nations
• Launches eService Platform

Saudi Arabia issued Ministerial Decision No. 3852 dated 2nd July 2021 on local rules of origin stipulating national rules of origin for the eligibility of preferential duty treatment of imported goods when imported from the Gulf Cooperation Council (GCC) into Saudi Arabia based on the GCC Unified Economic Agreement.

Goods produced in any of the GCC countries are considered as national products and should receive duty exemptions on import, the Saudi Cabinet decided.

Following the Cabinet Decision, new guidance has been issued by the Zakat, Tax and Customs Authority (ZATCA) specifying conditions that must be fulfilled before submitting any request for customs duty refund enabling verification of the Rules of Origin (RoO) for goods imported from GCC countries.

The requirements and conditions for the request of customs duty refund on goods of GCC origin are as under:

• The importer needs to make a provision for a bank or cash guarantee amounting to customs duties and other taxes subject to the preferential treatment
• The bank guarantee must be from a bank subject to the supervision and control of the Saudi Central Bank (SAMA)

Request for refund of customs duties must be filed by the importer within 90 days from the date of clearance of the goods of GCC origin on the condition that the request includes the following requirements:

• Certificate of Origin (CoO)
• Copy of the customs declaration eg. from Bayan, under Saudi Central Bank supervision
• National certificate issued by the competent authority in the country of GCC origin
• Valuation certificate for goods from the country of origin
• Proof of payment for the value of the goods
• Bill of lading
• International Bank Account Number (IBAN)
• Copy of invoices
• Copy of Bank Guarantee

Besides the above-mentioned requirements, the value-added percentage following national laws of the country of origin must be certified by a Public Accountant from the country of origin, with a licensed and certified branch operating in Saudi Arabia.

Furthermore, all documents must be verified by ZATCA and other appropriate Saudi authorities by conducting visits to the GCC manufacturing facilities. The process of verification may also be delegated to a competent third party.

In the event of any objections on customs duty refund, the same needs to be done per Common Custom Law of the GCC nations.

Before applying for a customs duty refund, the importers must ensure that they comply with all the rules of the soil including ZATCA rules and regulations. Penalties may be levied if goods declared to originate from the GCC do not meet the requirements specified.

ZATCA has launched an eService platform for Customs Duty Refund on their website permitting an importer in Saudi Arabia to file a request for Customs duties or insurance fee refund. To make a valid claim for the refund, all importers need to provide a completed customs declaration along with all relevant documents for becoming beneficiaries of this service.

The Process of filing an online claim for a refund involves the following steps.

• Logging on to the ZATCA website
• Filling in the refund request information
• Approving the acknowledgement, undertaking and application submission
• Receiving notification by text message
• Approval or Rejection of application

The customs declaration must be on or after the 3rd of July, 2021 and goods of GCC origin must be contained in the declaration. The refund shall be made in Saudi Riyal, SAR.