Saudi Arabia imposes excise tax on specific goods considered harmful to health: tobacco and tobacco products, energy drinks, and sugar-sweetened beverages. The tax is administered by ZATCA. This guide covers applicable products and rates, registration and filing obligations, excise on imports, and penalties. See VAT, customs duties, and ZATCA penalties.
Overview
Excise tax is a selective consumption tax levied on designated products. It applies to both locally produced and imported goods. Producers, importers, and in some cases stockists or distributors may be responsible for reporting and paying the tax. Rates are typically expressed as a percentage of the retail selling price (or a specific base). GCC member states have coordinated excise regimes; Saudi's implementation is under the Excise Tax Law and ZATCA regulations.
Products Subject to Excise and Rates
The main categories are: (1) tobacco and tobacco products — typically subject to a high rate (e.g. 100% or as set in the implementing regulations); (2) energy drinks — often 50%; (3) sugar-sweetened beverages (soft drinks) — often 50%, with possible differentiation by sugar content (e.g. per 100g or 100ml). ZATCA and the Integrated Tariff have been updated with subcategories for sweetened drinks based on sugar content; confirm the exact rate for your product from ZATCA's official tariff and excise guidance.
| Product | Rate (illustrative) |
|---|---|
| Tobacco and tobacco products | 100% |
| Energy drinks | 50% |
| Sugar-sweetened beverages | 50% (may vary by sugar content) |
Who Must Register
Any person who produces, imports, or stocks excisable goods in Saudi Arabia may be required to register for excise tax with ZATCA. Registration is typically mandatory when you cross the threshold or engage in a taxable activity (production, import, or release from a designated zone). Check the Excise Tax Law and ZATCA portal for the current registration threshold and scope. Failure to register when required can lead to penalties and back-tax assessments.
Registration with ZATCA
Excise registration is done through the ZATCA portal. You will need your commercial registration and other business details. Once registered, you receive an excise tax number and must file returns and pay tax on time. If you are also registered for VAT, the same portal may be used for both; ensure you complete excise-specific registration if you handle excisable products.
Filing and Payment
Registered persons must submit excise returns and pay the tax due according to the period set by ZATCA (e.g. monthly or as specified). The return reports the quantity and value of excisable goods produced, imported, or released, and the tax due. Payment is made through the portal or designated channels. Late filing and late payment attract penalties; see ZATCA penalties. Keep records of production, imports, sales, and tax calculations for audit.
Excise on Imports
Imported excisable goods are subject to excise tax at the border (or when released from a customs zone). The importer must declare the goods under the correct classification (aligned with the Integrated Tariff and excise categories), calculate the excise due, and pay it as part of clearance. Excise is in addition to customs duty and VAT. Ensure your customs broker or internal team applies the right excise rate and reports to ZATCA as required.
Penalties
Non-registration, underreporting, late filing, and late payment can result in fines, interest, and recovery of the tax due. Penalties are set under the Excise Tax Law and ZATCA regulations. Implement proper classification, record-keeping, and timely filing to avoid exposure. See ZATCA penalties for the full schedule.
Excise Compliance Checklist
- Determine if your products fall within excisable categories (tobacco, energy drinks, sweetened beverages) and the correct rate per ZATCA.
- Register for excise tax with ZATCA if you produce, import, or stock excisable goods and meet the registration requirement.
- File excise returns and pay tax by the deadline; keep records of quantities, values, and tax calculations.
- At import, declare excisable goods under the correct tariff/excise classification and pay excise with customs and VAT.
- Reconcile production and import data with sales and stock; correct errors via amended return if permitted.