Customs Duty and Landed Cost Calculator for Saudi Imports

This customs duty calculator takes the supplier invoice value, the exchange rate, freight and the duty rate from the Saudi customs tariff, and works out customs duty, import VAT and the landed cost of the shipment at your warehouse door. It then divides that cost by the units received, giving the figure the item is booked at in inventory and the base for its selling price. If the shipment holds items on different tariff lines, switch on "Several items and cost allocation" to spread freight and charges by value, weight or quantity.

How to calculate customs duty and landed cost

Customs duty is charged on the customs value of the goods: the transaction value on the supplier invoice plus freight and insurance to the place of import, in other words the CIF value. Import VAT is then charged at 15% on the customs value after adding customs duty, excise tax and any other charges, as ZATCA's guideline on imports and exports explains. Landed cost is everything you paid until the goods reached your warehouse: their value, freight, duty, clearance and local trucking.

CIF = Goods × FX + Freight & Insurance · Duty = CIF × Rate · VAT = (CIF + Duty + Other) × 15% · Landed = CIF + Duty + Other + Local (+ VAT if not recoverable)

The Saudi customs tariff and HS codes: where the rate comes from

The customs tariff is a schedule that gives each product a tariff line and a duty rate. The line starts with the Harmonized System (HS) code, an international numbering of goods, and the Integrated Customs Tariff adds national digits after it. Search by code or product description in the customs tariff inquiry service, then type the line's rate into the calculator.

Choosing the line is the importer's responsibility, and two similar products can fall under lines with different rates. Ask your supplier for the HS code printed on their commercial invoice and check it with your customs broker before the goods ship, not after they land. If the product carries an import restriction or needs a conformity certificate, the same search result shows it.

VAT on imported goods

Import VAT in Saudi Arabia is ordinary VAT at 15%, due on import and paid by the importer before the goods are released. Its base is larger than the customs value because it includes customs duty, excise tax and other charges, so a shipment carrying SAR 2,000 of duty is taxed on 42,000, not 40,000.

A registered business deducts this VAT as input tax on its return when it is the importer of record on the customs declaration. It keeps the import documents and the electronic statement Customs issues for the VAT paid against its tax number, and claims the VAT in the period it was paid rather than the declaration date, under ZATCA's input tax deduction guideline. That is why the VAT stays out of its inventory cost, even though it is cash out on release day. A business that is not registered cannot recover it, so it becomes part of the item's cost; the "Not registered" button in the calculator adds it.

Allocating freight and charges across items

The freight and clearance bills come as one figure for the shipment, while inventory needs a cost for each item. Allocating by value suits items of similar size, by weight suits shipments where weight sets the freight charge, and by quantity suits identical units. Choose the basis after switching on "Several items and cost allocation" and the calculator gives each item its share, with the last item taking the rounding difference so the total equals the freight bill.

Landed cost in your inventory books

Under IAS 2, the cost of purchase includes import duties, non-recoverable taxes, and transport and handling to bring inventory to its location. The landed unit cost is therefore the figure the item is booked at on receipt, and the one cost of goods sold is later drawn from. Booking the supplier price alone shows a fatter margin on every sales invoice, and the gap surfaces as an inflated expense at month end.

The customs declaration and clearance: what to carry into the calculator

The customs declaration is the document your broker files in the importer's name, showing the tariff line, customs value, duty and VAT due. Before shipping, the calculator runs on your estimates; after customs clearance, copy the actual duty and VAT from the declaration and the broker's fee and trucking from their invoice, and the landed cost becomes a book figure rather than an estimate. If Customs assesses a different customs value from your invoice, the declaration is what counts.

Common mistakes when costing imports

• Charging duty on the invoice value alone, when it applies to the value including freight and insurance.
• Working out import VAT on the customs value alone and leaving duty out of its base.
• Adding import VAT to inventory cost in a registered business that recovers it, which inflates cost by an amount you get back on the return.
• Converting the supplier invoice at the rate on the order date, when your books use the rate on the date of the entry.
• Loading all freight onto the most expensive item, or splitting it equally across items of very different weight.

What to do after the result

Download the result as an Excel file and keep it with the shipment papers: rates and charges sit in the top cells and every row carries its formulas, so when the customs declaration arrives you change the duty or the exchange rate and the whole cost updates. Price from the landed unit cost, never from the supplier price.

When shipments arrive every month in different currencies

One shipment fits in a spreadsheet. Two or three a month, each with its own currency, exchange rate and broker, turn cost allocation and item cost updates into recurring work, and the true margin is read late. At Microtec we offer importers in the Kingdom an ERP accounting system covering purchasing, inventory, sales, finance and HR. Try it with the items from your next shipment.