# Importing to Saudi Arabia: Landed Cost, VAT and Customs
*A practical guide to working with international suppliers, freight, and customs accounting*

> **In short:** Run imports and exports without surprises: allocate landed cost correctly, handle import VAT and Saber fees, and pick the right delivery terms and lead times.

- **URL:** https://www.snad.io/en/blog/import-export-logistics-saudi-guide
- **Arabic original:** https://www.snad.io/blog/import-export-logistics-saudi-guide
- **Category:** Industry — Wholesale Trade
- **Tags:** Import and Export, International Trade, Supply Chains, Customs, Snad
- **Published:** 2026-03-27
- **Updated:** 2026-08-02
- **Publisher:** Snad (snad.io)

International trade is the lifeblood of many Saudi companies, whether you import raw materials for a factory, goods for a shop, or export local products to the world. Behind every successful shipment, though, sits a chain of accounting and logistics complications that starts at "purchase approval" and ends at "landed cost". This article walks through how to manage imports and exports effectively, and how to avoid the financial surprises that quietly eat your margin when freight and customs costs go uncounted.

## Calculating landed cost accurately

The biggest mistake importers make is treating the factory purchase price as "the cost". The real cost is the product price plus international freight, insurance, customs duties, Value Added Tax (VAT) and local transport. To price a product correctly, your system has to spread all of those charges across the value of the goods received. Without an accurate landed cost, you can discover that you are selling at a loss even while your sales figures look excellent.

## Handling foreign currencies in accounting invoices

When you buy in dollars or yuan, the SAR value of the invoice moves with the exchange rate on the payment date and on the receipt date. Accounting-wise, currency differences have to be treated properly so the financial statements stay accurate. A professional system lets you enter the invoice in its original currency, converts it to SAR automatically, and tracks any gain or loss caused by exchange rate swings.

## How Snad simplifies your international purchasing

The purchasing and inventory module in Snad helps you organise international trade operations. You can record supplier invoices, book the customs and logistics charges tied to a shipment inside the accounts so you can follow their effect on margins, and track item movements between warehouses. With Snad you get a complete accounting view of your import operations, which supports sound pricing and better purchasing decisions.

## Allocating shipment costs across items: which basis for which expense?

Landed cost starts with a practical question: on what basis do you allocate each expense? Using item value as the only basis distorts the numbers, because a small high-value box of spare parts would absorb a larger share of the freight bill than a bulky cheap piece of furniture, when logistically the opposite is true.

| Expense | Most appropriate allocation basis | Why |
|---|---|---|
| Sea or air freight | Volume (CBM) or gross weight | The carrier prices on volume or weight, whichever is higher |
| Shipment insurance | Item value | The premium is calculated on the insured value |
| Customs duties | Value of the items within each tariff heading | The rate differs from one heading to another, so headings must not be mixed |
| Clearance and handling fees | Number of packages or weight | The service relates to handling, not to the value of the goods |
| Transport from port to warehouse | Volume or weight | A truck is booked by load, not by value |
| VAT on imports | Not allocated to cost | Recorded as deductible input tax |

Mixing several bases within a single shipment is perfectly normal. What matters is that you fix the rule, document it, and have your [inventory system](/inventory) apply it automatically on every receipt, so comparisons between shipments still mean something over time.

## Import VAT: paid at the port, recovered in the return

VAT applies at 15% to goods imported into the Kingdom regardless of their classification or the customs duty rate on them, and even where they are exempt from customs duty, per the Imports and Exports guideline issued by the Zakat, Tax and Customs Authority (ZATCA). It is settled on entry of the goods together with the customs duties and the other amounts shown on the customs declaration used to release the goods. The customs declaration is filed electronically and includes the tariff heading, the country of origin, and the description and value of the goods.

Deduction is not granted on intent: input tax is only deductible where there is a tax invoice or customs documentation evidencing the amount of tax due. The customs declaration is your document here, so file it linked to the purchase order itself.

| Annual taxable supplies | Return frequency | Filing deadline |
|---|---|---|
| More than SAR 40 million | Monthly | Last day of the month following the period |
| SAR 40 million or less | Quarterly | Last day of the month following the period |

The penalty for filing a return late is not less than 5% and not more than 25% of the tax that should have been declared. The cash effect matters too: you pay the tax at the port and recover it in the period return, and the gap between the two can run to weeks that you have to fund. Check your figures with the [VAT return calculator](/tools/finance/vat-return-helper) before you file.

## Saber: fees and timelines that belong in your schedule

The conformity file has to be ready before the shipment leaves the foreign port. The Saber platform (linked to the Fasah platform) issues two types of certificate, each with its own fee and validity period:

| Certificate | Fee excluding VAT | Validity | Issuance time |
|---|---|---|---|
| Product Certificate of Conformity | SAR 500 | One year | 5-6 business days |
| Shipment Certificate of Conformity | SAR 350 | 60 days | 5 business days |

Two practical notes. First, the Shipment Certificate is valid for 60 days, so issuing it far too early before sailing risks it expiring while the goods are still at sea. Second, the Product Certificate of Conformity runs for a full year and serves more than one shipment, which makes it logical to treat as a period expense rather than the cost of a single shipment. As for requirements, commercial products need product registration followed by a certificate of conformity or a self-declaration; products not intended for display to consumers need the product data, the bill of lading, and the invoice for the imported product.

## The delivery term decides when goods enter your books

The delivery term agreed in the purchase order is not a logistics detail. It determines which costs the supplier carries and which fall on you, and from which point the risk transfers to you. The accounting effect is immediate:

- If risk transfers to you at the port of shipment, the goods enter your books as goods in transit from the shipping date, not the arrival date.
- If the supplier carries freight and insurance to the port of arrival, their price includes both and you will see no separate freight lines, but you lose the detailed view of transport cost.
- If the supplier handles everything to your warehouse door including duties, landed cost becomes simple to calculate, but your ability to negotiate its components all but disappears.

Make the delivery term a mandatory field on the [purchase order](/purchases), not a line in a chat thread. Under audit it is the reference that explains why a shipment was recognised in one particular month, and why it did or did not carry freight costs.

## Real lead time and the reorder point

What throws importers off is rarely the price; it is the time. Lead time is not what the supplier promises. It is the sum of order confirmation, production, booking space on the vessel, sailing time, discharge and release, and then inland transport. Add to that the time needed to issue the conformity certificates.

The practical rule: measure the lead time for real, from the purchase order date to the date the stock is entered, supplier by supplier, then base your decision on the average and the variability rather than on promises. Reorder point = average daily consumption x lead time in days + safety stock. The more the lead time fluctuates, the more safety stock you need, and that is a real cost that has to show up in your pricing. The [reorder point calculator](/tools/inventory/reorder-point-calculator) gives you a starting number to build on, which you then adjust with your own experience of each supplier.

### Recurring mistakes in importers' books

- Recording clearance and handling fees as an administrative expense instead of allocating them to item cost, which makes the gross margin look better than it is.
- Deducting import VAT without keeping the customs declaration linked to the invoice and the purchase order.
- Closing the month without recognising goods in transit, which leaves an unexplained gap between purchases and inventory.
- Converting the supplier invoice at an estimated exchange rate instead of the approved rate on the date the tax became due.
- Pricing the product as factory price plus a fixed margin, ignoring that the next shipment may arrive with a completely different transport cost.

## Frequently asked questions

### How do I calculate VAT on imported goods?

The tax is normally paid at customs, and Snad records it as input tax that can be deducted in your tax return, provided the correct documents are held and linked to the invoice.

### When can I deduct the VAT paid on imports?

The tax is settled on entry of the goods together with the customs duties and the other amounts shown on the customs declaration used to release the goods. It is only deductible as input tax where a tax invoice or customs documentation evidencing the amount of tax due is held. Link the customs declaration to the purchase order and the invoice inside the system so the deduction is easy to prove on inspection. (Per the Zakat, Tax and Customs Authority guidelines, accessed August 2026.)

### What is my VAT return frequency if all my purchases are imported?

The frequency is set by your annual taxable supplies, not by your purchases. A business whose annual supplies exceed SAR 40 million files monthly; a business whose supplies do not exceed that threshold files quarterly, and the filing deadline is the last day of the month following the tax period. The penalty for filing late is not less than 5% and not more than 25% of the tax that should have been declared. (Per the Zakat, Tax and Customs Authority, July 2026.)

### How much do Saber certificates cost and how do I account for them?

Registration for a Product Certificate of Conformity costs SAR 500 excluding VAT and is valid for one year, while issuing a Shipment Certificate of Conformity costs SAR 350 excluding VAT and is valid for 60 days. Because the Shipment Certificate is tied to one specific shipment, it makes sense to load it onto that shipment's landed cost, whereas the annual Product Certificate of Conformity serves multiple shipments and is treated as a period expense. (Per the Saber platform, accessed August 2026.)

### Which exchange rate do I use to convert a foreign supplier invoice?

For VAT purposes, the foreign currency amount must be converted to SAR using the daily exchange rate approved by the Saudi Central Bank on the date the tax became due, not an internal estimate. The difference between the entry date and the actual payment date is recorded as a separate exchange gain or loss, kept away from the cost of the goods, so that inventory cost is not contaminated by currency movements. (Per the VAT Implementing Regulations.)

### My shipment left the supplier's factory but did not arrive before month end. Do I recognise it in inventory?

The answer depends on the delivery term agreed in the contract or the purchase order. If risk transferred to you at the port of shipment, the goods are part of your inventory and are recognised as goods in transit at their value plus whatever costs you have borne up to the closing date. If risk still sits with the supplier, they are not recognised. Check the delivery term before every monthly close instead of relying on the container's arrival date.

### What should the shipment file contain for an audit?

Collect the following in one file per shipment: the purchase order and delivery term, the commercial invoice in its original currency, the bill of lading, the packing list, the conformity certificates issued through Saber, the customs declaration, the clearance and inland transport invoices, and the payment evidence. This file is what explains the landed cost figure for each item, and it is also what supports the deduction of the input tax related to the import.

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## About the publisher
**Snad (سند)** — a private Saudi software company
based in Riyadh, founded 2025. Legal form: Sole proprietorship.
Commercial registration: 7038154642
VAT number: 310959226500003
Only official domain: snad.io
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