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Saudi Arabia Introduces New Regulations for Value-Added Tax on Pre-Owned Vehicles


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Zakat, Saudi Tax and Customs have decided that value added tax should be calculated based on profits from the sale of used cars and not on the total value of the sale.

According to a statement released by the authorities via Twitter, he confirmed that he added “the possibility of calculating value-added tax on profits from the sale of eligible used vehicles, excluding the total value of the sale, starting next July 1st.”

#Zakat _ and _ tax _ and _ customs Provides the ability to calculate VAT on the profit margin from the sale of “suitable used vehicles”.

– Zakat, Tax and Customs Service (@Zatca_sa) May 19, 2023

According to the statement, the authorities’ availability of this option is due to their desire to “reduce the value-added tax on qualified used cars.”

The statement stipulated several conditions for the application of this option, including that “the used car must be qualified by the authorities, and the car must be present and previously used in Saudi Arabia”, and other conditions.

The Authority issued a statement on the new value-added tax calculation method, explaining that it “applies to the difference between the purchase price and the sale price – the realized profit margin – instead of imposing it on the full amount of the consideration received.”

How is VAT calculated after applying the rate of return for qualifying used vehicles?

– Zakat, Tax and Customs Service (@Zatca_sa) May 19, 2023

Source: RT

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