• In applying the provisions of this Agreement, the following words and phrases shall have the meanings assigned to each, unless the context requires otherwise:

  • Council:The Cooperation Council for the Arab States of the Gulf.

  • Agreement:The Unified Selective Tax Agreement for the Council States.

  • Tax:The selective tax for the Council States.

  • Member State:Any state enjoying full membership in the Council in accordance with its Charter.

  • Territory of the Council States:All territories of the Member States.

  • Ministerial Committee:The Financial and Economic Cooperation Committee of the Council States.

  • Local Law:The selective tax law and related legislations issued by each Member State.

  • Person:Any natural or legal person, public or private, or any other form of partnership.

  • Unified Customs Law (System):The Unified Customs Law (System) of the Council States.

  • Tax Authority:The authority or government administration in the state responsible for managing, collecting, and enforcing the tax.

  • Selective Goods:Goods subject to tax in accordance with the provisions of this Agreement.

  • Locally Produced Selective Goods:Selective goods produced in the Member State.

  • Import of Selective Goods:Entry of selective goods from outside the territory of the Council States into any Member State in accordance with the provisions of the Unified Customs Law (System).

  • Suspended Tax Status:The status in which the tax liability on locally produced or imported selective goods is suspended in accordance with the provisions of Article (5) of this Agreement.

  • Tax Warehouse:The place where the licensee is permitted to produce, transform, possess, store, or receive locally produced or imported selective goods under suspended tax status.

  • Licensee:The person authorized by the Tax Authority to produce, transform, possess, store, transport, or receive locally produced or imported selective goods in a tax warehouse during the course of their work.

  • Due Tax:The tax on selective goods payable to the Tax Authority.

  • Person Obliged to Pay Tax:The person responsible under the provisions of this Agreement for calculating, declaring, and paying the due tax.

  • Value of Selective Goods:The value on which the tax may be calculated in accordance with the provisions of this Agreement.

  • For Business Purposes:The value or quantity of supplies exceeding what is stipulated in the Unified Customs Law and its Executive Regulations.

  • Importer:The person who imports selective goods.

Without prejudice to the applicable legislation in the Council countries that prohibit the import, export, or production of certain goods, and any other indirect tax laws, the provisions of this Agreement shall apply to:
1. The production of selective goods within the territory of the member state.
2. The import of selective goods into the territory of the Council countries.

The tax is imposed on goods harmful to human health and the environment, as well as luxury goods, according to the list determined by the Ministerial Committee, and the Ministerial Committee has the authority to amend that list.

1. Without prejudice to the provisions of Article (5) of this Agreement, the tax is due on the date of the release of the excise goods for consumption.
2. Excise goods are considered released for consumption in the following cases:

• A- The production of excise goods outside a suspended tax status.

• B- The release of excise goods from any suspended tax status.

• C- The possession of excise goods outside any suspended tax status for which the due tax has not been paid.

• D- The importation of excise goods unless they are in a suspended tax status.

• E- The loss or damage of excise goods in a suspended tax status in the country where they were located, unless the licensee proves that the loss or damage was due to reasons beyond their control, in accordance with the conditions and procedures specified by the member state where the goods were lost or damaged.

1. The excise tax applies in the following two cases:

• A- The production of excise goods or their transformation, possession, storage, or receipt of locally produced excise goods by the licensee.

• B- The transfer of excise goods under a suspended tax status in any of the following cases:

  • 1) From a tax warehouse to a tax warehouse within the same member state.

  • 2) From a tax warehouse to a tax warehouse in another member state.

  • 3) From a tax warehouse to the point of exit of goods from the territory of the Council states for export or re-export in accordance with the provisions of the Unified Customs Law.

  • 4) Upon importation to a tax warehouse in a member state.

2. The Ministerial Committee shall determine the rules for the application of this article and the mechanism for the movement of excise goods under a suspended tax status between the member states.

1- The due tax shall be calculated either as a percentage of the value of the excise goods or as a specific amount per unit of the excise goods. It is also permissible to calculate the due tax as both a percentage and a specific amount per unit of the excise goods, in accordance with what is determined by the Ministerial Committee.
2- The value on which the due tax may be calculated shall be the retail selling price of the excise goods, provided that the retail selling price is the price set by the importer or producer of the excise goods, or according to the standard price list that will be periodically agreed upon between the tax authorities in the Council countries, whichever is higher, excluding the due tax and value-added tax.

The person obligated to pay the due tax is:
1. The person who produces excise goods outside the suspended tax status.
2. The person who possesses excise goods for which the due tax has not been paid outside the suspended tax status, as determined by the tax authority.
3. The licensee upon the release of excise goods from the suspended tax status.
4. The licensee when offering excise goods for consumption due to their loss or damage while in suspended tax status, in accordance with the provisions of item (2-h) of Article (4) of this Agreement.
5. The importer of excise goods.
6. The licensee when transferring excise goods contrary to the conditions of suspension stipulated in Article (5) of this Agreement.
7. Any other person who offers excise goods for consumption.