The company "De La Rue Plc" is an authorized supplier of tax stamps.

• 1. The authorized supplier is responsible for the production and supply of tax stamps.

• 2. The tax stamps shall be in the form of digital marks and/or physical labels (referred to in these guidelines as physical stamps) to be placed on the packaging of specified selective goods.

• 3. The purchased tax stamps for the specified selective goods manufacturer designated in the purchase order (referred to in these guidelines as the specified manufacturer) shall be prepared within (2) working days from the date the licensee obtains approval from the authority.

• 4. The digital marks are made available to the manufacturer of the specified selective goods through the electronic system for tax stamps.

• 5. The method of delivery and its terms shall be agreed upon between the authorized supplier and the specified manufacturer, and the authority shall not participate in this agreement nor be a party to any disputes arising from it.

• 6. If the authorized supplier of tax stamps and the specified manufacturer agree that delivery shall be based on the term "Ex Works" according to the International Commercial Terms (Incoterms) as published by the International Chamber of Commerce in 2010 and any updates thereto, the preparation period for the physical stamps for delivery shall not exceed (2) working days.

• 7. If the authorized supplier of tax stamps and the specified manufacturer agree on a method other than delivery based on the term "Ex Works," the agreement between these two parties must specify a defined method and timing for the delivery of the physical stamps to the specified manufacturer.

• 8. The authorized supplier shall supply the physical stamps in the form of bundles or rolls, prepared in a manner that enables manufacturers to cut them automatically to the appropriate size for the tax stamp to be placed on the packaging of the specified selective goods. Purchase applicants wishing to obtain physical tax stamps must provide the relevant information and requirements to the authorized supplier before finalizing the purchase order.

• 9. Notwithstanding the provisions of this clause, the authority may - in exceptional cases determined by it - allow the registrant for selective tax purposes who does not manufacture the specified selective goods and who offers or will offer those specified selective goods for consumption in the Kingdom, to receive the tax stamps from the specified manufacturer to place them himself on the goods he will offer for consumption in the Kingdom, and the provisions related to the delivery of tax stamps contained in this clause shall apply to him.

• A. Purchase Procedures:

  • 1. Registrants for the purposes of selective tax have the right to access the electronic system for tax seals provided by the Authority. This system allows registrants to submit claims for the purchase of tax seals, and the claims submitted through it are subject to the Authority's approval before being processed by the approved supplier.

  • 2. To claim the purchase of tax seals, the registrant must do the following:

    • A- Provide the required information, as specified in paragraph (2) of Article Eleven of the regulation.

    • B- Specify the manufacturer indicated in the purchase claim and the place of manufacture.

    • C- Identify the recipient of the tax seals by choosing to receive them personally or by authorizing a third party to place them on the specified selective goods themselves.

  • 3. The specified manufacturer may be the same registrant authorized to submit the purchase claim or a third party, and the place of manufacture may be within or outside the Kingdom.

  • 4. If the Authority approves the purchase claim for tax seals submitted by the registrant, the approved supplier coordinates with the specified manufacturer or the registrant approved to receive the tax seals - according to the claim approved by the Authority - to place them on the specified selective goods themselves.

  • 5. The specified manufacturer must obtain the Authority's approval before the purchase claim is approved and must provide the Authority with its registered information in the global (GS1) system (if requested by the Authority), and must have the necessary specialized equipment to connect to the electronic system for tax seals, enabling it to allocate, activate, and place the tax seals on the packaging and containers of the specified selective goods, in addition to aggregated (barcode) codes for various packaging levels specific to those goods (as determined by the Authority in agreement with the approved supplier according to the nature of each good). The approved supplier will provide manufacturers with the necessary instructions for using the electronic system for tax seals and related equipment.

  • 6. The Authority reviews the purchase claims submitted by the registrant and issues its decision regarding the claim for acceptance or rejection, stating the reasons for rejection within (15) fifteen working days from the date of submission.

  • 7. The minimum number of physical seals that a registrant can submit a claim to purchase is as follows:

    • A- (70,000) seventy thousand tax seals if the purchase claim is for physical seals in bundles (each bundle contains (500) five hundred physical seals).

    • B- If the purchase claim is for physical seals in rolls, the minimum purchase claim is for one roll containing (5000) five thousand physical seals.

    • C- The Authority may approve a smaller number of seals allowed for purchase for the registrant who will receive the tax seals from the approved supplier and place them on the specified selective goods themselves.

  • 8. The maximum quantity of tax seals that a registrant is allowed to submit a claim to purchase during any calendar year is equal to the total quantity that was released and made available for consumption in the Kingdom by that person during the previous calendar year. The Authority may, in specific cases, allow the registrant to purchase a quantity exceeding this maximum limit based on a request submitted by the registrant to the Authority explaining the reasons for the excess quantity request.

  • 9. The registrant submitting the purchase claim is allowed to cancel or modify the purchase claim during the period following the submission of the claim until the date of the Authority's decision on the claim. In the event of any modifications to the purchase claim, the period for reviewing and approving the claims will be (10) ten working days from the date of the modification.

  • 10. If the Authority approves the purchase claim, the applicant is not allowed to cancel or modify it.

• B. Payment Procedures:

  • 1. According to paragraph (3) of Article Ten of the regulation, the approved supplier is not entitled to announce the prices for purchasing tax seals without agreeing on them with the Authority.

  • 2. After the Authority approves the purchase claim, the manufacturer specified in the claim is obligated to pay the value of the tax seals mentioned in the claim to the approved supplier; the Authority may allow the registrant to pay the value of the purchase of the tax seals mentioned in the claim to the approved supplier.

  • 3. The approved supplier clarifies the prices for purchasing the seals in the specified form for the purchase claim of tax seals.

  • 4. The purchase price of the tax seal for tobacco products shall not exceed (0.0568) Saudi Riyals - excluding taxes and fees - for each tax seal, including the physical label and digital mark.

  • 5. The purchase price of the tax seal for energy drinks and soft drinks shall not exceed (0.0227) Saudi Riyals - excluding taxes and fees - for each tax seal in the form of a digital mark.

• C. Procedures for Refund of Tax Seals:

  • 1. In principle, no amounts paid for the purchase of tax seals are refunded immediately after the payment process is completed by the specified manufacturer or registrant. In exceptional cases where the approved supplier has delivered damaged tax seals to the specified manufacturer or registrant indicated in the claim, the approved supplier shall provide replacement tax seals after being notified by the specified manufacturer or registrant and verifying the damage, provided that the specified manufacturer or registrant cancels the damaged tax seals through the electronic system, and must destroy the seals in their possession that have been canceled.

  • 2. The procedures and rules for supplying tax seals apply to the supply of any replacement tax seals provided by the approved supplier to the specified manufacturer.

• A. Specifications of Tax Stamps:

  • 1. Tax stamps include digital marks and/or physical labels that are placed on the packaging of specified selective goods.

  • 2. The specifications of tax stamps that come in the form of digital marks are as follows:

    • A- The digital mark consists of encoded symbols that can be read automatically (the specified manufacturer may choose the data carrier, for example, DotCode or Datamatrix) and symbols that can be read in the usual way by users (composed of letters and numbers).

    • B- The area where the code is placed on the packaging must not overlap with the area designated for general health warnings, and the packaging must meet all specifications, controls, and standards to be followed in the Kingdom.

    • C- The specified or registered manufacturer who will place the tax stamps themselves may choose the method of placing the digital mark on the packaging of the specified selective goods using laser engraving technology or inkjet printing technology.

    • D- The details of the digital mark assigned to each package must be displayed on a solid color background that provides sufficient contrast to allow the digital mark to be scanned easily.

    • E- The encoded symbol that can be read automatically and the symbol composed of letters and numbers in the digital mark must be visible with specific details for each package.

    • F- The specified or registered manufacturer who will place the tax stamps themselves may choose the font used to print the symbol composed of letters and numbers on the packaging, ensuring it is easy to read.

    • G- The digital marks must be placed on the packaging in flat, wrinkle-free areas.

    • H- The specified or registered manufacturer who will place the tax stamps themselves must ensure the digital marks that can be read automatically are easy to read. The quality level of the automatically readable codes must not be less than 3.5 according to the international standard No. (15415) of 2011 from the International Organization for Standardization (ISO/IEC 15415:2011), and the specified or registered manufacturer who will place the tax stamps themselves must ensure that the automatically readable codes remain readable for a period of no less than five years from the time they are placed on the packaging.

  • 3. The specifications of physical tax stamps in the form of dry labels are as follows:

    • A- Label size: 20 mm × 44 mm.

    • B- Paper weight: 70 grams per square meter.

    • C- Each label is assigned a unique, non-repeating code.

  • 4. The specifications of physical tax stamps in the form of self-adhesive/manual labels are as follows:

    • A- Label size: 20 mm × 44 mm.

    • B- Paper weight: 40+ / -2.4 grams per square meter.

    • C- Adhesive weight of 12-17 grams per square meter.

    • D- Each label is assigned a unique, non-repeating code.

• B. Placing Tax Stamps on Goods:

  • 1. According to paragraph (3) of Article Nine of the regulation, the person who offers the specified selective goods for consumption in the Kingdom is responsible for placing the tax stamps on those goods, and this person may allow the specified manufacturer to place the tax stamps on these goods for the specific requirements necessitated by placing the tax stamps on the packaging of the specified selective goods.

  • 2. The specified manufacturer may be the same person registered for selective tax purposes allowed to request the purchase of tax stamps if the specified selective goods are manufactured in the Kingdom, and it may also be a third party not registered for selective tax purposes based outside the Kingdom for the specified selective goods imported into the Kingdom.

  • 3. The person responsible for placing the tax stamps must place the tax stamps on each individual package containing the specified selective goods.

  • 4. The application of placing tax stamps on the packaging of specified selective goods is as follows:

    • A- Cigarettes: The packaging must include tax stamps in the form of physical labels and digital marks placed on them.

    • B- Molasses: The packaging must include tax stamps in the form of physical labels.

    • C- Other tobacco products: The packaging must include tax stamps in the form of physical labels.

    • D- Soft drinks: The packaging must include tax stamps in the form of digital marks.

    • E- Energy drinks: The packaging must include tax stamps in the form of digital marks.

  • 5. The tax stamps that come in the form of digital marks must be placed on cigarette packaging as follows:

    • The following illustration shows where to place the digital mark on the package, noting that the illustrations below indicate that the digital mark is located at the bottom of the package; however, the area where the encoded symbols that can be read automatically can be printed, as well as the position of the digital mark, whether horizontally or vertically to the right or left, is at the discretion of the specified manufacturer.
      Figure 1- Placement of digital marks on cigarette packaging - Bottom of the package (illustration for clarification purposes only)

  • 6. The tax stamps that come in the form of physical labels must be placed on cigarette packaging as follows:

    • A- The label must be placed on the package so that it extends from one side of the package to its back, ensuring that the label covers the joint that moves when the lid is opened, thus damaging the label immediately upon opening the package.

    • B- The illustrations below show what the specified manufacturer must consider regarding the placement and location of the label.
      Figure 2- Placement of physical labels on cigarette packaging (the following illustration for clarification purposes only)
      Figure 3- Placement of physical labels on cigarette packaging - Dimensions (the following illustration for clarification purposes only)

  • 7. The tax stamps that come in the form of physical labels must be placed on molasses (shisha) packaging as follows:

    • Figure 4- Placement of physical labels on molasses (shisha) packaging - Dimensions (the following illustration for clarification purposes only)

• A. Persons obligated to pay the due tax:

  • 1. According to what is stated in subparagraph (W) of paragraph (1) of Article Seven of the Regulation, if it is found that any person possesses specific selective goods for commercial purposes outside a suspended tax status for which the due tax has not been paid, and there are no valid and activated tax stamps on them, the Authority will consider that person to be aware that the due tax on those goods has not been paid and will hold them responsible for paying the due tax on those specific selective goods and any associated penalties.

  • 2. If a person submits to the Authority to declare that the specific selective goods in their possession do not have valid tax stamps or have incorrect, counterfeit, or improperly activated tax stamps, and additionally provides the Authority with sufficient information regarding the origin of these specific selective goods, such that based on that information another person can be held responsible for paying the due tax, the Authority will not require the person who disclosed that information to pay the due tax.

  • 3. In the event that a person possessing specific selective goods that do not have valid and activated tax stamps does not disclose to the Authority about those violating goods, but nonetheless provides the Authority with sufficient information regarding the origin of these specific selective goods, such that it is practically possible based on that information for another person to be held responsible for paying the due tax, the Authority may decide to prioritize the collection of the due tax from the other person first.

  • 4. The previous two paragraphs do not apply to a person who imports specific selective goods into the Kingdom, or a person who manufactures specific selective goods within the Kingdom, or a person who affixes tax stamps to specific selective goods within the Kingdom.

• B. Refund of tax related to export:

  • 1. According to paragraph (3) of Article Fifty-Two of the Regulation, a request for a refund of the tax paid on specific selective goods that were put into consumption in the Kingdom and were subsequently transported or exported outside the Kingdom must include a request to deactivate the tax stamps affixed to the specific selective goods.

  • 2. The request for deactivation must be attached to the request for a refund of the selective tax, and it must include a list of the tax stamps related to the specific selective goods that have been exported or are intended to be exported outside the Kingdom.

  • 3. The Authority may reject the request for deactivation and the request for a refund of the selective tax if it is unable to verify that the specific selective goods and the tax stamps affixed to them have been exported outside the Kingdom.

• 1- Without prejudice to the provisions contained in Article Nine of the Implementing Regulation of the Selective Tax System, and in application of the powers stated in Article Fourteen of the Implementing Regulation of the Selective Tax System, the Governor of the Authority shall have the right to approve the exemption from the provisions contained in Chapter Seven "Tax Stamps" of the Implementing Regulation, for a specified period, for a specific registrant, for a specific shipment, or for a specific good among the specified selective goods, or for one or more of the aforementioned cases, and this shall only be as an exceptional procedure in the event of a failure of the tax stamp system or in the event of a regulatory requirement for that procedure or in any other cases deemed necessary by the Authority, and a decision shall be issued by the Governor in this regard.