Zero-rating an export of goods from the Kingdom: the evidence and ninety-day rule in Article 32

Article 34(1)(a) of the Common VAT Agreement provides that the export of Goods outside the GCC Territory shall be subject to the zero rate. The Agreement defines an Export of Goods as a Supply of Goods from any Member State to the outside of the GCC Territory in accordance with the provisions of the Common Customs Law. Article 31(1) of the Implementing Regulations confirms that the supplies listed in Chapter Six are zero-rated in accordance with the Agreement and the Law, and Article 32 sets the conditions a supplier must meet to apply the zero rate to an export of goods from the Kingdom.

This article addresses exports of goods to a place outside Council Territory. The treatment of goods under a customs duty suspension situation and in special zones is now governed by Article 32 bis, which is addressed in our separate article on customs duty suspension and special zones.

The ninety-day evidence requirement

Article 32(1) provides that, for the purpose of applying the zero rate to an Export of Goods from the Kingdom to a place outside of Council Territory, the Supplier must retain evidence that the Goods have been transported from Council Territory within ninety (90) days of the Supply taking place.

Article 32(2) provides that a Taxable Person who does not have evidence that the Goods have been transported from Council Territory may not treat the Goods as being exported outside of Council Territory after ninety (90) days of the Supply taking place.

The evidence required

Article 32(3) provides that evidence of the Goods being transported outside of Council Territory must include at least each of the following:

• export documentation issued by the Customs Department, or the equivalent Department of another Member State, showing the Goods being formally cleared for export on behalf of the Supplier or Customer of that Supply;
• commercial documentation identifying the Customer and the place of delivery of the goods; and
• transportation documentation evidencing the delivery to, or receipt of goods outside of Council Territory.

The requirement is cumulative. Customs clearance alone does not satisfy it without the commercial and transportation documents, and vice versa.

Rejection of insufficient documentation

Article 32(4) allows the Authority to reject documentation held by a Taxable Person where it does not sufficiently evidence the Goods being transported outside Council Territory. In that case the Supply is treated as made without export from Council Territory until such evidence is later obtained.

Supplies made after export formalities

Article 32(5) provides that a Supply of Goods which is treated as made after the export formalities have been completed is also subject to the zero rate, provided the Supplier obtains the commercial and transportation documentation prescribed by the third Paragraph to evidence the transportation of the Goods outside Council Territory, within the time limit prescribed by the first Paragraph.

Re-exports after repair or processing

Article 32(6) provides that all re-exports of movable Goods that were temporarily imported into the Kingdom for repairs, renovation, modification or processing are subject to the same evidential requirements. Article 34(1)(c) of the Agreement zero-rates such re-exports together with the Services added to the goods, and Article 32 bis(2), added by ZATCA Board Resolution No. (01-06-24), zero-rates the re-export of transportable goods temporarily imported for repair, restoration, conversion or processing, and the services added to them, provided the provisions and procedures of the Unified Customs Law are met.

The deletion of Article 32(7)

Before ZATCA Board Resolution No. (01-06-24), Article 32(7) treated the Supply of Goods situated in the Kingdom while subject to a customs duty suspension regime as zero-rated, subject to evidence of the location of the goods. The Resolution deleted that clause and added Article 32 bis in its place. Paragraphs (1) to (6) of Article 32, set out above, remain in the form of the ninth edition.

Practical points

Exporters should track the ninety-day period from the date of each supply and hold all three categories of evidence on file. Where evidence is not obtained in time, the supply cannot be treated as an export, and the supplier should account for tax accordingly until the evidence is later obtained.

Instruments relied on: Common VAT Agreement, Article 1 (definition of Export of Goods) and Article 34(1)(a) and (c); Implementing Regulations, ninth edition, 26/11/1444H corresponding to 15/6/2023G, unofficial English translation, Articles 31 and 32; ZATCA Board Resolution No. (01-06-24) dated 17/05/1446H, published in the Official Gazette, Umm Al-Qura issue 5082, on 18 April 2025, unofficial English translation, deleting Article 32(7) and adding Article 32 bis. The Arabic text prevails.

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