SAUDI ARABIA TAX ALERT | Amendments to the Excise Tax Implementing Regulations (December 2025)
ZATCA has issued significant amendments refining the tax base, reclassifying excise goods, updating tax rates, and strengthening compliance obligations. The amendments take effect from January 1, 2026.
Why This Matters
The amendments change how excise tax is determined, placing greater weight on product classification, pricing, and registration data. As a result, errors in these inputs can directly affect excise filings for both multinational and domestic groups.
Key Changes
- Tax Base: Must be calculated using the highest of the following:
- Declared Retail Selling Price (RSP).
- ZATCA’s Reference RSP.
- Unified GCC Standard Price.
- Reclassification:
- Carbonated beverages removed from the excise scope.
- Sweetened beverages are reclassified into four sugar-content tiers.
- Tobacco, energy drinks, and electronic smoking devices remain taxable.
- New Rates:
- 100% on tobacco, energy drinks, and electronic smoking devices/liquids.
- Sweetened beverages taxed per litre: SAR 0 (tiers 1–2), SAR 0.79 (tier 3), SAR 1.09 (tier 4).
- RSP Rules: ZATCA may reject declared RSPs and apply a Reference RSP.
- Tax Stamps: Mandatory for tobacco and energy drinks; no longer required for carbonated beverages.
- Declarations: Importers must declare excise tax on imports; returns are due by month-end following the tax period.
- Registration: New obligations to register excise goods before release for consumption and provide supporting documents/lab reports.
- Transitional Rules: Refunds may be claimed where tax rates decrease, subject to conditions.
Point of View
Management attention should focus on whether product classification, Retail Selling Price, and registration data are accurate and consistent, as these inputs now directly determine the excise tax base and filings. The amendments shift emphasis away from rate calculations and towards the quality of underlying pricing and product information used in excise reporting. For both multinational and domestic groups, applying these inputs consistently across products, entities, and filings is essential where reference pricing and pre-release registration apply.
Recommended Actions
Businesses should reassess product classifications, update pricing and systems for new rates, ensure timely registration of excise goods, strengthen internal controls, and prepare ZATCA data requests or reassessments.
