Saudi Arabia clarifies GCC origin of goods

Local contact

EY Global

13 Jul 2021
Subject Tax Alert
Categories Indirect Tax
Jurisdictions Saudi Arabia

Executive summary

On 2 July 2021, Saudi Arabia published Ministerial Decision No. 3852 on the local rules of origin. The Decision sets out the national rules of origin for the eligibility of preferential duty treatment when importing Gulf Cooperation Council1 (GCC) goods into Saudi Arabia. The Decision took effect on 2 July 2021.

Detailed discussion

Goods produced in any of the GCC countries are treated as national products and will receive national product duty exemptions upon import of those goods into another GCC country.

To benefit from national product exemptions:

  • The goods must obtain a valid certificate of origin from the relevant GCC country.
  • The goods must be shipped directly from the GCC country of origin to Saudi Arabia.
  • The local added value from production of the goods in any GCC state must equate to at least 40%.
  • The licensed manufacturer must generally meet a standard requirement of 25% national workforce. Where it does not meet the standard requirement, it must meet a minimum of 10% national workforce, and the local value-added requirement will be increased by the percentage of the national workforce deficit (e.g., if the national workforce is 10%, the local added value would need to be at least 55%).

Certain processes, such as packing, assembly and mixing of products, will not satisfy the GCC origin requirements. Manufacturing, transporting, invoicing or shipping from a GCC free zone is also unlikely to satisfy the GCC origin requirements.   

Penalties may apply where goods are declared to originate from the GCC but do not meet the requirements under the Decision.

The Zakat, Tax and Customs Authority (ZATCA) of Saudi Arabia has yet to publish details on how it will conduct the process of verifying the origin of products in line with the Decision.


Businesses should review how the Decision affects their supply chain and the manufacturing, movement and invoicing of goods between GCC countries.


For additional information with respect to this Alert, please contact the following:

EY Consulting LLC, Dubai
  • Ramy Rass
  • Richard Dearing
  • Zain Satardien
Ernst & Young LLP (United States), Middle East Tax Desk, New York
  • Asmaa Ali

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.