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

In recent years, Saudi Arabia has been reforming its tax system and making it more efficient for businesses to operate. Among these changes, the Excise Tax system was introduced. The indirect tax mentioned here includes items that are considered harmful to public health or environment on the taxes that are to be charged on certain goods like tobacco products, sugary drinks and energy drinks. Excise Tax Registration in KSA is important for businesses engaged in the production, import and sale of these goods to comply with the country’s regulations.

Additionally, due to the advances of E-invoicing in Saudi Arabia, the tax space is getting increasingly digital. The shift to electronic invoicing is helping E-invoicing in Riyadh and the Kingdom as a whole streamline tax collection and increase transparency. This guide is going to explain the Excise Tax Registration process in Saudi Arabia, in a clear and step by step manner, and will also discuss about the basics of the tax system in the Kingdom, and how E-invoicing is being used in this Kingdom’s changing taxation landscape. As either a newbie trying to get this stuff straight, or otherwise, this guide will help you through the excise tax registration process with ease.

Excise Tax in KSA

In Saudi Arabia, excise tax is an indirect tax that is imposed on certain products which are considered harmful to public health and environment. This tax should serve the purpose of discouraging consumption of these goods and at the same time maintaining revenue for public services. Excise tax is levied on the following items in the Kingdom.

• Taxes on all tobacco and smoking related products: 100%.
• Energy drinks are taxed at 100% to limit consumption.
• Soft drinks and sweetened beverages are subject to a 50% tax rate.
• Electronic smoking devices and liquids: The electronic smoking devices and liquids are taxed at 100%.

Besides these, excise tax is levied on some other products such as perfumes, luxury items and certain types of sugary foods in order to protect public health and the environment.

Who Should Register for Excise Tax in KSA?

Excise Tax Registration is a must for all businesses that are engaged in the activities relating to some goods which are subject to excise tax in Saudi Arabia. If you do business importing, manufacturing, selling or storing products such as tobacco, energy drinks or sweetened beverages, you should comply with the excise tax regulations and register with the Zakat, Tax, and Customs Authority (ZATCA). This registration guarantees that your business will meet Saudi Arabia’s tax obligations and avoid penalties or disruption of operations.

• Businesses importing excise goods for commercial purposes must register for excise tax in order to legally handle such products.
• Local manufacturers that produce excise taxables: Excise taxables such as tobacco or energy drinks manufacturers are required to register.
• Entities with a large amount of excise goods for commercial purpose must register to avoid the stockpiling of excise goods.
• Businesses selling excise taxed products within Saudi Arabia must register and comply with tax obligations and issue compliant invoices.
• These registrations are important to make sure that all businesses that deal with excise goods pay the tax that they have to pay so as to contribute to public health and national revenue.

Pre-Registration Requirements

Before you start the Excise Tax Registration in Saudi Arabia, must have the following requirements:

• Get your commercial registration number if your business is registered under it.
• Registration Application: You should have access to the ZATCA online portal to submit your online Account.

Step-by-Step Guide to Excise Tax Registration in KSA

ZATCA’s official online portal is used to do the Excise Tax Registration in Saudi Arabia. To elaborate, the registration process is described in detail, step by step below.

1. Visit ZATCA’s Website

Visit the official website of Zakat, Tax, and Customs Authority (ZATCA) at https://dzit.gov.sa/ and start the registration process. Keep in mind that if you are not already on the official site, please, do not visited any site that can cause scams or fraudulent activity. The website will give you some information, guidelines and the access point to the online portal where you can start the registration.

2. Log In or Create an Account

If you have a ZATCA account and are already a business, you can log in using your username and password. Your will need to create an account for new users. It will be your gateway to apply, to manage your taxes and access other tax related services. Ensure that you secure and stored your login credentials for further use.

3. Click on the Excise Tax Registration Option.

After logging in, go to the main menu of ZATCA portal. Select the “Excise Tax Registration” option. It will then take you to the section where you can begin the registration process. You should follow the instructions carefully and select the right registration option according to your business activity.

4. Fill Out the Registration Form

The first step is to fill in the registration form with the required business information. It includes your business’s commercial registration number, contact information and information regarding your operations. Information is needed to be accurate and up to date as will be used for verification. This is where you should do your time and check that all the fields have been filled correctly in order to avoid delays in the process.

5. Fill in the Form and the Verification Code

Once you fill out the registration form, submit it for ZATCA’s review. A verification code will be sent on the registered mobile number of the business account. To complete the verification process, enter this code in the provided field. This step is to ensure that the submitted application is valid and associates the registration request with your business contact information.

6. Choose Your Business Activity

You will be asked to choose your line of business connected with excise goods. It includes whether your business is involved in producing, importing, selling or holding excise goods. In the registration process, you need to indicate the type of excise goods your business is dealing with so that ZATCA can determine your tax obligations and any specific industry regulations.

7. Provide Additional Details

Here, you will be prompted to specify more about your business. It includes the kind of excise goods you trade in (e.g. tobacco, energy drinks), your estimated annual turnover or the amount of excise goods you sell or import. You may also have to provide your import/export licenses if applicable. These details assist ZATCA to classify your registration based on your business excise tax liabilities.

8. Upload Documentation

To register, you will be required to upload supporting documents. The documents include a copy of your business’s Commercial Registration (CR) and, if applicable, import/export licenses or any other documents as requested by ZATCA. These documents are used to prove that your business is legally standing and can handle excise goods. All documents should be scanned clearly and within the file size requirements.

9. Submit the Application for Review

After you have filled all the sections of the form and uploaded the required documents, you can submit your application for checking by ZATCA. Your application will be verified by the authority and your application will be assessed. Once approved, you´ll be sent your excise tax registration number. You need to follow up and ensure that you are informed that your registration is successful and you are indeed fully in compliance with the regulations.

Post-Submission Requirements

After submission of your application, ZATCA will review it. If all is well, you will get a certificate of excise tax registration for your business. Keep in mind that:

• The review process may include ZATCA requesting additional documents or clarification.
• You will be informed through email or SMS on your registration status.
• If there are any changes in your business such as expansion or updates in commercial registration, notify ZATCA.
• If your business no longer deals with excise goods, you can apply for voluntary deregistration through ZATCA’s online system.
• Make sure all tax returns and payments are paid after deregistration to avoid penalties.

Excise Tax Compliance

Once you register, your business has to meet the following obligations:

• Filing Excise Tax Returns: Periodically file excise tax return as required by ZATCA.
• Keeping Records: Record all transactions regarding excise goods such as production, imports and sales.
• Tax Payments: Make sure that excise tax is paid promptly by the date mentioned in the return.

Conclusion:

In conclusion, Excise Tax Registration in KSA is a must for businesses that are involved in the production, import or sale of excise goods. However, by knowing the registration process and meeting all the necessary requirements, businesses can run smoothly without any penalties. It is important to stay on top of excise tax obligations in Saudi Arabia’s ever changing tax landscape from registering through ZATCA’s portal, maintaining accurate records and making timely tax payments.

However, whether you are dealing with tobacco, energy drinks or any other excise taxable products, it is important to follow the correct procedures of Excise Tax in KSA. In addition to E-invoicing in Saudi Arabia, staying up to date with all taxes will keep your business legally compliant and help the Kingdom to regulate harmful products. Also, ensure to regularly check up on the ZATCA portal for updates and know what kind of changes that could rule your registration and tax bases existing.