GTL Summary:

Document Type: IR - Implementing Regulations
Law: Value Added Tax Law
Decision Number: 3839-article-34
Year: 2016
Country: 🇸🇦 KSA
Official Name: Article 34 - Transportation Services for Goods or Passengers outside the Kingdom and Supplies Relating to Transportation
Last updated at: 2025-11-27 14:38:44 UTC

Chapter 6 - Zero-Rated Supplies

Article 34 - Transportation Services for Goods or Passengers outside the Kingdom and Supplies Relating to Transportation

  1. The international transport of Goods is zero-rated in accordance with these Regulations.

  2. International transport of passengers is subject to zero-rating in accordance with the provisions of this Regulation.[48]

  3. Services which are directly connected and incidental to a Supply of international passenger transport are zero-rated. Such services include:

    1. transporting luggage accompanied by passengers, including domestic pets, bicycles, prams and additional luggage charges,

    2. transporting vehicles and trailers of passengers,

    3. transporting airport passenger charges and passenger load supplements,

    4. seat reservations,

    5. sleeping berths and cabin charges.

  4. The supply of qualifying means of transport is subject to zero-rating, provided that the customer submits to the Authority or the supplier a certificate confirming that the supplied means of transport qualify in accordance with the provisions of this Article, and the supplier must retain this certificate. [49]

  5. Any services relating to Goods or passenger transportation, as defined in Article 25 of these Regulations are zero-rated provided these are either:

    1. ancillary to and provided with a Supply of zero-rated international transport,

    2. provided in respect of a qualifying means of transport at an airport or port.

  6. Subject to the Supplier obtaining a certificate from the Customer that the Supply of Goods and services will be in relation to a qualifying means of transport, the maintenance, repair, or modification of a qualifying means of transport, including the Supply of replacement parts, consumables and other necessary components ordinarily affixed or incorporated into the means of transport in question in connection with those services, are zero-rated. Such zero-rating only applies provided that the purpose of the Supply of those Goods and services is to ensure the continued operation of the vehicle, aircraft or vessel as a qualifying means of transport. Maintenance and repair services must be physically carried out on or at the qualifying means of transport to qualify for zero-rating under this Paragraph.

  7. For the purposes of this Article, international transport is the provision of a transportation service by means of a vehicle, aircraft or vessel together with a driver or pilot and with a crew where necessary for the purpose of that service, provided that the transportation service involves transport of Goods or passengers either to a place outside the Kingdom, or from a place outside the Kingdom into the Kingdom.

  8. “Qualifying means of transport” refers to transport vehicles whose main purpose is to carry out international transport. This includes vehicles designed to carry ten (10) or more persons, or equipment intended to transport goods on a commercial basis, such as aircrafts or ships used for transporting passengers or goods commercially. It does not include means of transport that have been converted or used for private or recreational purposes.[50]

  9. Before issuing the certificate referred to in Paragraph (4) of this Article, the customer must verify the eligibility of each means of transport to ensure it meets all the conditions and provisions stated in this Article.[51]

  10. For the purposes of this Article, the main purpose of using the means of transport is considered international transport when its use for such purposes does not fall below seventy-five percent (75%) of total capacity. This percentage is calculated based on the following ratios:[52]

    1. The number of international trips by the means of transport compared to the total trips made by it.

    2. The distance covered in international trips by the means of transport compared to the total distance covered in all trips made by it.

    3. The revenue earned from international trips by the means of transport compared to total revenue from all trips made by it.

    4. The operating cost of international trips by the means of transport compared to total operating costs for all trips made by it.

The operator of the means of transport must prove that this percentage has been achieved based on actual data extracted from the previous twelve months for each existing and operational means of transport, or based on planned and projected data for the following twelve months for any new means of transport that has not yet been used or is intended to be acquired.

Footnotes

[48] Paragraph (4) of Article 34 amended pursuant to the decision of the Board of Directors of the Zakat, Tax and Customs Authority by Resolution No. (1-4-23) dated 26 Dhul-Qa'dah 1444 AH, corresponding to 15 June 2023. Prior to the amendment, it read as follows
'(2) The Supply of a qualifying means of transport, or of any vessel or aircraft used principally for international transportation of passengers and goods, is zero-rated.'

[49] Paragraph (4) amended pursuant to the decision of the Board of Directors of the Zakat, Tax and Customs Authority by Resolution No. (1-4-23) dated 26 Dhul-Qa'dah 1444 AH, corresponding to 15 June 2023. Prior to the amendment, it read as follows
'(2) The Supply of a qualifying means of transport, or of any vessel or aircraft used principally for international transportation of passengers and goods, is zero-rated.'

[50] Paragraph (8) of Article 34 was amended pursuant to the decision of the Board of Directors of the Zakat, Tax and Customs Authority No. (05-22-09) dated 05 Jumada Al-Awwal 1444 AH, corresponding to 29 November 2022. Prior to the amendment, it read as follows
'(8) 'Qualified Military Goods,' for the purposes of applying the provisions of this Article, shall mean military goods manufactured locally that meet all of the following conditions:

  1. The goods supplied shall be manufactured locally by the same supplier who applies the zero rate to such supply.

  2. The supplier shall have obtained a Certificate of Supply of Qualified Military Goods from the General Authority for Military Industries (GAMI) confirming that the supply satisfies all requirements and conditions set forth under this Article.

[51] Paragraph (9) was added pursuant to the decision of the Board of Directors of the Zakat, Tax and Customs Authority No. (1-23-4) dated 26 Dhu al-Qa'dah 1444 AH, corresponding to 15 June 2023.

[52] Paragraph (10) was added pursuant to the decision of the Board of Directors of the Zakat, Tax and Customs Authority No. (1-23-4) dated 26 Dhu al-Qa'dah 1444 AH, corresponding to 15 June 2023.

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