Saudi Arabia Introduces New Duty-Free Regulations in Arrival Lounges

Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) has introduced new regulations for duty-free markets in arrival lounges, aimed at enhancing the travel retail sector. The Kingdom is investing heavily to position itself as a global leader in travel retail, with significant projects and partnerships enhancing its tourism ecosystem.

By Giulia Interesse

In a major development for Saudi Arabia’s travel retail industry, the Zakat, Tax and Customs Authority (ZATCA) announced a set new regulations for duty-free markets in arrival lounges across all land, sea, and air customs points in the Kingdom.

Effective upon its release on May 14, 2024, this update aims to simplify customs duties and tax exemptions for travelers entering Saudi Arabia, providing clear guidelines on purchase limits and allowed quantities of goods.

Details of the new regulations

Tax-free purchase limit

According to the new regulations, each passenger can spend up to SAR 3,000 (approx. US$800) on duty-free items, with all purchases required to be for personal use. Additionally, there is a maximum allowance of 200 cigarettes per passenger.

Licensing application

Building on the licenses already granted to duty-free operators in departure lounges, as per the new regulations, ZATCA is now accepting applications for licenses to operate in arrival lounges at customs ports. This process requires operators to complete regulatory procedures with the relevant authorities at the ports, in line with the established rules and regulations for duty-free markets.

ZATCA has also implemented a streamlined system to facilitate these applications, allowing operators to contact them through one of the following ways:

• 24/7 call center at 19993;
• Official “X” account @Zatca_Care;
• Email at info@zatca.gov.sa; or
• Instant messaging on their website www.zatca.gov.sa.

Significance of the new regulations

ZATCA has highlighted that these exemptions and the acceptance of license applications are part of its broader efforts to enhance logistical services for duty-free market operators at both arrival and departure lounges. The introduction of duty-free markets in arrival lounges aims to improve the experience of passengers arriving in Saudi Arabia by allowing them to purchase products exempt from customs duties and taxes.

Previously, ZATCA issued detailed customs rules, conditions, and procedures for establishing duty-free markets at air, sea, and land ports, in line with the GCC Common Customs Law. These regulations followed the Council of Ministers’ resolution, which approved the establishment of duty-free markets at various ports to facilitate sales to passengers both arriving in and departing from Saudi Arabia.

Saudi Arabia’s travel retail sector outlook

Saudi Arabia’s travel retail sector is set for significant growth, driven by the Kingdom’s ambitious Vision 2030 framework. This reform blueprint is geared towards opening the Saudi Arabian market to global tourism and positioning travel retail as a key part of the evolving landscape. Major projects like NEOM, Diriyah, The Red Sea Development Company, and AMAALA are attracting international attention for their innovative and sustainable development plans.

These initiatives underscore Saudi Arabia’s commitment to creating a top-tier tourism ecosystem, with travel retail enhancing the visitor experience from the moment they arrive. In such context, the approval of duty-free arrival shops and partnerships, such as Cruise Saudi’s collaboration with Gebr. Heinemann, further highlight the Kingdom’s dedication to offering premium retail options.

Additionally, Saudi Arabia’s airports are transforming into luxury hubs, led by global retailers. Examples include the presence of brands like Lagardère Travel Retail, Gebr. Heinemann, and Aer Rianta International.

The Public Investment Fund (PIF) is heavily investing in the sector to ensure competitive global standards. Strategic moves, including potential mergers and acquisitions (M&As), reflect a broader ambition to dominate both the local and international travel retail markets. This approach aims to rapidly elevate Saudi Arabia’s travel retail sector, enhancing the travel experience and supporting the Kingdom’s economic goals.

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