Complete Guide to Excise Tax Registration in Saudi Arabia (KSA)

Excise tax in Saudi Arabia is a type of indirect tax levied on certain goods that are harmful to public health or the environment. It is applicable to products such as tobacco, energy drinks, and sugary beverages. If your business is involved in the production, import, or sale of these goods, you are require d to register for excise tax with the Zakat, Tax, and Customs Authority (ZATCA). 

This guide will walk you through the excise tax registration process in the Kingdom of Saudi Arabia (KSA), detailing the necessary steps, requirements, and compliance protocols.

Excise Tax in KSA

Excise tax is imposed on specific goods to discourage their consumption and to generate revenue for public services. The goods subject to excise tax in Saudi Arabia include:

• Tobacco products: All tobacco and smoking-related products are taxed at 100%.
• Energy drinks: These beverages face a 100% tax.
• Carbonated and sweetened drinks: Soft drinks and sweetened beverages are taxed at 50%.
• Electronic smoking devices and liquids: Both the devices and the liquids used in them are subject to a 100% excise tax

Who Should Register for Excise Tax in KSA?

Any entity that performs the following activities must register for excise tax in KSA:

• Importing excise goods: Businesses importing excise goods for commercial purposes.
• Producing excise goods: Local manufacturers of goods subject to excise tax.
• Stockpiling excise goods: Entities holding large quantities of excise goods for commercial purposes.
• Selling excise goods: Businesses selling goods subject to excise tax within KSA.

Pre-Registration Requirements

Before starting the registration process, ensure the following:

• Commercial Registration: You need a valid commercial registration number for your business.
• Online Account: You should have access to ZATCA's online portal where you will submit your application.

Steps by Step Guide Excise Tax Registration in KSA

The registration process for excise tax in KSA is done through ZATCA’s official online portal. Here’s a step-by-step breakdown of the process:

1. Visit ZATCA's website: https://dzit.gov.sa/.
2. Log in using your business’s username and password, or create an account if you are a new user.
3. Once logged in: Select the "Excise Tax Registration" option from the portal's main menu.
4. Fill out the required information in the registration form, which includes business details, commercial registration, and relevant contact information.
5. Submit the form after which ZATCA will verify your details. Also enter a verification code sent to your registered mobile number.
6. Choose your business activity related to excise goods (e.g., producer, importer, etc.).
7. Provide Additional Details: 

• The type of excise goods you deal with (e.g., tobacco, energy drinks).
• Estimated annual turnover or volume of excise goods sold or imported.
• Import/export licenses, if applicable.

8. Upload Documentation

• Copy of the Commercial Registration (CR).
• Import/export license, if applicable.
• Any other documents specified during the registration process.

9. Submit the application for review.

Post-Submission Requirements

Once your application is submitted, ZATCA will review it. If everything is in order, your business will receive a certificate of excise tax registration. Keep in mind that:

• ZATCA may request additional documents or clarification during the review process.
• You will be notified via email or SMS of your registration status.
• If there are any changes to your business, such as expansion into new excise goods, changes in commercial registration, or other significant updates, it is your responsibility to notify ZATCA through their portal and update your registration accordingly.
• If your business no longer deals with excise goods, you can apply for voluntary deregistration through ZATCA’s online system. After deregistration, ensure all tax returns and payments are settled to avoid penalties.

Excise Tax Compliance

After registration, your business must comply with the following obligations:

• Filing Excise Tax Returns: Excise tax returns must be filed on a periodic basis as determined by ZATCA.
• Maintaining Records: Keep detailed records of all transactions involving excise goods, including production, imports, and sales.
• Tax Payments: Ensure timely payment of the excise tax as per the due date specified in the return.

Conclusion

Excise tax registration is a mandatory process for businesses involved with goods subject to excise tax or “Excise Goods” in Saudi Arabia. Ensuring timely registration and compliance with the regulations will help your business avoid penalties and operate smoothly. Make sure to follow the steps outlined above, keep accurate records, and stay updated with any changes in excise tax laws in the Kingdom of Saudi Arabia.

By adhering to these guidelines, businesses can efficiently manage their excise tax obligations and contribute to a more structured and transparent tax system in the Kingdom.