SAUDI ARABIA Law and Practice Contributed by: Dana Halwani and Leanne Farsi, Derayah LLPC
signatories exemptions from customs duties. As a member of the GCC, Saudi Arabia levies the GCC common external tariff of at least 5% on most goods which are imported from non-GCC countries. Tariff rates vary, with the exact rate depend - ing on the HS Code of the product in question. Saudi Arabia also imposes high excise duties on certain products, for example, cigarettes, cigars, tobacco and tobacco products are subject to an excise tax of 100%. Under Article 7 of the Competition Regulation (Royal Decree No M/75 of 29 Jumada Thani 1440 Hejra corresponding to 6 March 2019), businesses that plan to engage in a transaction resulting in an economic concentration must notify the General Authority for Competition (GAC) at least 90 days before the transaction is completed, if the total value of the annual sales for all the enterprises taking part in the economic concentration surpasses SAR100 million. On 29 March 2023, the GAC announced that this minimum threshold for reporting an economic concentration was to be raised to SAR200 mil - lion. Since then, the GAC announced additional reporting limits for economic concentrations, which have been subject to amendment. They are, as at the time of writing, as follows: • the total worldwide annual sales value of the parties to the economic concentration must exceed SAR200 million; • the total worldwide annual sales value of the target establishment must exceed SAR40 million; and 6. Competition Law 6.1 Merger Control Notification
• the total annual sales value in Saudi Arabia of all of the parties to the economic concentra - tion must exceed SAR40 million. Article 1 of the Implementing Rules of the Com - petition Regulation issued by the GAC Board Resolution No (337) dated 25 Muharram 1441 Hejra corresponding to 24 September 2019, defines an economic concentration as “any action that results in a total or partial transfer of ownership of assets, rights, equity, stocks, shares or liabilities of a firm to another by way of merger, acquisition, takeover or the joining of two or more managements in a joint manage - ment, or any other form that leads to the con - trol of a firm(s) including influencing its decision, the organisation of its administrative structure, or its voting system”. Therefore, a full merger or acquisition is not necessary to trigger the report - ing requirement; for example, the formation of an unincorporated joint venture or a consortium may also be sufficient. Special rules apply to mergers and acquisitions involving listed companies, which are set out in the Merger and Acquisitions Regulations (Reso - lution of the Board of the Capital Market Author - ity No 1-50-2007 of 21 Ramadan 1428 Hejra corresponding to 3 October 2007), as amended by Resolution No 3-45-2018 of 7 Sha’ban 1439 Hejra corresponding to 23 April 2018. 6.2 Merger Control Procedure Under the 2019 Competition Regulation and its Implementing Rules, the parties to an economic concentration exceeding the threshold must submit a report for GAC approval at least 90 days before the completion of the action. This report is submitted through the GAC’s website and must contain the following information:
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