How customs duty is calculated in Saudi Arabia

The Saudi import cost formula is short: duty equals the HS-code rate applied to CIF value (goods + insurance + freight), and VAT equals 15% of CIF value plus duty. Most goods carry a 5% duty rate; protective rates of up to 25% apply to selected categories, and many raw materials and machinery lines enter at 0%. The HS code decides everything, which is why classification is checked before money changes hands.

The formula with a worked example

Take a shipment with goods value $20,000, freight $2,000 and insurance $200: CIF = $22,200. At a 5% duty rate, duty = $1,110. VAT = 15% × ($22,200 + $1,110) = $3,496. Total border charges: $4,606, before port handling and brokerage fees. A misclassified HS code that carries 15% instead of 5% would add another $2,220 to the same shipment, which is the practical cost of guessing classification.

Rate ranges by category: raw materials and much machinery 0–5%; general consumer goods 5%; furniture, textiles and selected foodstuffs 5–15%; a small protective list up to 25%. Exact rates are set per HS code in ZATCA tariff schedules.

What legitimately changes the number

• Correct HS classification, confirmed against tariff schedules, not guessed from the product name.
• Origin: GCC-origin goods with valid certificates may qualify for preferential treatment.
• Accurate CIF composition: freight and insurance belong in the base; unrelated charges do not.
• Exemptions for specific industrial and project imports, where they formally apply.

Clearway checks the HS code and computes the full landed cost, duty, VAT, port and brokerage fees, in one written quote within 30 minutes during working hours, before the importer commits to the purchase.