Saudi Arabia

Background

Effective as of May 2019 the Kingdom of Saudi Arabia decided to impose an excise tax on both electronic cigarettes and heated tobacco products. The tax is implemented by the General Authority of Zakat and Tax.

Application of excise tax in Saudi Arabia is carried out in accordance with GCC Unilateral Agreement for ‎Excise Tax, although not every Member State of the Gulf Cooperation Council implements excise taxes. Only the Kingdom of Bahrain has introduced excise taxes on vapor products (nicotine containing liquid and e-shisha).

Taxes on e-cigarettes

The General Authority on Zakat and Tax created new excise tax categories for e-liquids and e-cigarette devices. A tax of 100% is levied on the pre-tax price of these products. This is the same rate applied to cigarettes and smoking tobacco which implies an effective tax rate of approximately 50%.