Many of the expatriates living in the Kingdom of Saudi Arabia often think about importing a vehicle to the Kingdom. In this writing we will discuss about the process of importing a vehicle. It is allowed to import a vehicle to the Kingdom provided that the prerequisites regarding the vehicle to be imported and the importer are fulfilled, required documents are provided and duties are paid. Let us discuss all these points in detail.
The Importer of Used Vehicles
- The person who wants to import a vehicle to Saudi Arabia shall be in possession of a valid Iqama (permit of residence in KSA) or he must be a citizen of any of the GCC states. GCC states are the following: United Arab Emirates, The Kingdom of Bahrain, The Kingdom of Saudi Arabia, The Sultanate of Oman, The State of Qatar, and The State of Kuwait.
- Anyone who fulfills the above condition can import a vehicle to Saudi Arabia but the number of imported vehicles is limited to one vehicle per year.
- Importing more than one vehicle per year is considered a business of sale and import so only those people who have a valid registration in the business of vehicle import and sale can import more than one vehicle in a year.
- If an importer wants to import a 4WD vehicle, he needs to prove that his family is residing with him in Saudi Arabia and then the vehicle will be registered otherwise a single person cannot get the 4WD vehicle registered.
- The vehicles having number of seats more than five are classified as commercial vehicles. These vehicles can only be registered by companies and not by the individuals.
Used Vehicle to be imported
The vehicle being imported to KSA shall be in conformity with the following:
- The vehicles from Israel are not allowed to be imported to Saudi Arabia
- The vehicle shall match the driving standards of KSA. Saudi Arabia is one of the countries those follow the right hand side drive system, the vehicles with their steering at the left hand side are more suitable for this kind of driving. The vehicles having steering at the left hand side only are allowed to be imported.
- The steering shall be at the left hand side from the first time make. It means that if the vehicle initially had the steering at the right hand side as made by the manufacturer and after modification the steering is placed at the left hand, this kind of vehicle is not allowed to be imported.
- The vehicle’s body shall not be damaged otherwise it cannot be imported. If the damage on the body has occurred at the port in Kingdom where the vehicle has arrived, a certificate stating the facts shall be obtained by the competent authorities of port.
- Any vehicle that had been involved in any kind of accident cannot be imported to the Kingdom. It involves all the vehicles that had been involved in collision with other vehicle or anything else, drowning, rollover or fire etc.
- The vehicles being used by police department or as taxicabs are not permitted to be imported.
Required Documents for Assessment of Customs Duty
Customs department needs a certain set of documents for the assessment of the customs duty for the imported vehicle. This documentation differs on the basis of vehicles imported from GCC and Non-GCC states and the dates of import as well.
Vehicles Imported from GCC States
- Export form is on top of the list among the required documents, it shall be issued by the traffic department of the country in which the vehicle has been registered.
- If the vehicle is a second hand (used) vehicle then valid certificate of ownership of vehicle and a quittance document (a document that shows that the vehicle is not under a debt, a bank lease or mortgage) shall be obtained from the competent authorities of the country from which the vehicle is going to be exported.
- A document obtained by the customs administration of the country from where the vehicle is being exported, that declares the amount of customs on the vehicle.
- If the importer is not the owner of the vehicle than he is required to provide a legal power of attorney from the owner, giving the agent a right to dispose of (export or sale) the mentioned vehicle and the power of finalizing payments of customs duty levied on the vehicle. It is important to note that the document will not be considered valid after one year of issuance.
Documentation for Clearance Purposes among the GCC States
If the vehicle is imported for Saudi Arabia as the final destination of vehicle, through any port of any of the GCC states after 1st January, 2003, following document needs to be submitted:
- Original copy of the import declaration obtained from the first port where the vehicle has entered in the exporting country. If in case the original copy is not available then a legalized copy of the import declaration sealed with the clearance seal by the exporting country. This legalized copy shall also include all the information required about the vehicle and the amount of customs of the vehicle that is subject to clearance.
If the vehicle is imported to any of the GCC states and (i) the import was done after 1st January 2003 (ii) Saudi Arabia was not the final destination of this import rather the imported bought the vehicle from a market in any of the GCC States and now the owner wants to bring the vehicle to KSA, following documents need to be submitted:
- Original document that declares the statistics of customs duty on vehicle. It shall also be sealed with the clearance seal of the country from where the vehicle is to be exported along with all information required about the vehicle and the amount of customs duty on vehicle subject to clearance.
- Original copy or an attested copy of the declaration of import issued by the first port of entry in the country from where the vehicle is now being exported.
Vehicles Imported From Other Than GCC States
The vehicles imported from other countries and not from GCC States need following documents to be submitted:
- A legal document that indicates that the importer is owner of the vehicle. This document must be duly attested by the Saudi Commercial attaché or by the representative of the attaché duly authorized by him present in the country in which the vehicle was being purchased or it can also be issued by the chamber of commerce in the country of export of vehicle.
- A declaration of export issued by the customs administration of the country from where the vehicle is to be exported. The purchase invoice and the certificate of origin of the vehicle shall also be attached with this declaration.
- A document issued by the competent authorities for the administration of security in the country from where the vehicle is to be shipped. This document shall declare that the vehicle (was not used in any criminal activity and) is not wanted by them.
Evaluation of Second hand Vehicles:
- The value of vehicle for the purpose of customs duty is calculated while considering the price list issued by the manufacturer of vehicle. It is important to note that the vehicles built for special purposes and antique vehicles are excluded from this formula.
- The deduction of rate of depreciation of vehicle is done according to the model year and the charges of shipping and insurance of vehicle are added.
- The age of vehicle being imported is also considered while deducting the depreciation.
- In order to determine the age of vehicle in years and months, the date on which the vehicle is imported shall also be considered. It is to be noted that the model year is from 1st January to 31st December.
- No deduction is made if the vehicle is imported in the first six months of the model year (1st January to 30th June) as it is considered a new vehicle during this time period.
- The rate of deduction will be 2% or parts of it if the vehicle is imported in the last six months (1st July to 31st December) of the model year.
- If the vehicle is imported during the second year the rate for deduction will be 1% per month or parts of it, the rate will be the same until fifth year, calculated from the model year.
- For the vehicles those are imported after a time period of more than five years (calculated from the start of the model year) maximum rate of deduction can be 60% of price of the vehicle to be imported.
- Customs duty to be paid for vehicles is 5% and is 12% for the trucks being imported to KSA.
Following are some other points regarding import of vehicles.
Calculation of Storage Charges:
- Calculation of storage charges starts from the 14th day of unloading of goods from the means of transport through which the goods are transported to KSA.
- The above mentioned time period is reduced to 10 days at the ports where the goods being imported are examined through X-Ray machines
- The charges of storage are calculated at a rate of 20 Saudi Riyals per ton or a part of it per day as long as the goods are there at the port. Following are the exceptions to these rules:
- The consignment being imported is undergoing some official procedure.
- There is an unpredictable happening that is beyond human control and by the reason of that, it is unable for the importer to take away the consignment from the port.
- Some serious dispute arises between the authorities of port and the owner who has imported the goods.
- The time period specified for official holidays as mentioned in the regulations or during the times when port is closed for entry of consignments.
- According to the theory of reciprocity (the favors given by one state to the other state are returned in the same way), the items being imported by the Foreign Embassies and International Organizations are also excluded from the above rules.
Exemption from the Customs Duty:
Common Customs laws of the GCC states explain in the article 103 clause “b” that the personal belongings and gifts possessed by the passengers are being given an exemption from the customs duties, provided that these items are of personal nature and not of commercial nature, subject to the following conditions:
- The passenger shall be liable to produce the documents required, such as invoice of the item possessed by him, bill of lading and the delivery order.
- The fiscal value of such items must not exceed 3000 SR or the equivalent of this amount in any of the currencies officially used by the GCC states.
- The quantities shall be of personal nature, items possessed in commercial quantities will not be entitled of this exemption.
- The items shall not be of prohibited nature as mentioned in the Common Customs Law of GCC states or in the legislation made by the member state individually.
- The exemption will not be offered to the frequent travelers as per the record of customs office. A merchant who is doing business of same items those are in his possession will also not be liable of this exemption. Customs clearance process of these items does not require a customs declaration and a customs broker is also not required to be there. A note mentioned on the delivery order is enough to complete the procedure of customs clearance.
Completion of Customs Procedures:
- In order to facilitate the importers about the procedures of customs, Saudi Customs permits the importers, whether individual human beings or judicial persons, to finalize and complete the customs formalities about their imported goods by themselves. The imported goods of personal nature and the commercial consignments are included here.
- The importers are also allowed to authorize their agents to work on their behalf but they cannot authorize the customs brokers to do so.
Though it is not a legal obligation but the importer must keep in view that vehicles being imported shall be suitable for use in the extreme heat that is found in the whole Middle East in summer season, there shall be an effective and reliable system of air-conditioning in the vehicles. Heat shield for the engine of vehicle and the tyres need special attention and they must be purposely designed for the climate of hot countries. It is observed that the vehicles manufactured for countries with comparatively milder climates fail to perform well in the hot climate of KSA. The efforts in process of import, customs duties and the total cost of vehicle shall be compared with the price of a new vehicle available in Saudi Arabian market before importing a vehicle to the Kingdom.
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