Article 16 of the Saudi Value Added Tax Law

المادة 16 من نظام ضريبة القيمة المضافة · الفصل السادس: الاستيراد

The article provides that tax falls due on import into the Kingdom under the Agreement, and requires the importer to provide a guarantee covering the tax when it is suspended by customs.

Official text (Arabic)

This article has not been amended since the law was issued.

1 - تستحق الضريبة عند الاستيراد إلى المملكة، وفقاً للأحكام المنصوص عليها في الاتفاقية.

2 - في حالة تعليق الضريبة على استيراد السلع وفقاً لنظام (قانون) الجمارك الموحد، فيجب على المستورد تقديم تأمين يغطي قيمة الضريبة، وفقاً لما تحدده اللائحة.

This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers

Article 16 explained in plain English

This article regulates when value added tax falls due on imported goods, and what the importer must do if the tax is suspended.

First: tax falls due on import (paragraph 1)

Tax falls due on import into the Kingdom, in accordance with the provisions of the GCC Agreement.

Second: where the tax is suspended (paragraph 2)

If the tax on the import of goods is suspended in accordance with the Unified Customs Law, this suspension does not do away with the need to secure the tax.
In this case the importer must provide a guarantee covering the value of the tax.
The Regulations specify what relates to this guarantee.

The article does not state the cases of suspension themselves, which are taken from the Unified Customs Law, and it does not specify the form of the guarantee or its procedures, which are left to the Regulations.

Relation to other articles: it is preceded by Article 15, which provides that the value of imported goods is determined under the Unified Customs Law, and followed by Article 17, which refers to the Regulations the conditions for exempting personal luggage and gifts that come with travelers and the supplies of persons with special needs.

Importers should confirm the customs status of their shipments before they arrive and, where needed, use a lawyer specializing in tax and customs.

Practical example

An importer in Dammam brought in equipment under a customs regime that suspends the tax under the Unified Customs Law. Under the article, the suspension alone is not enough; the importer must provide a guarantee covering the value of the value added tax on the equipment, as the Regulations specify.

Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.

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