Al-Marsad newspaper: The Zakat, Tax and Customs Authority has confirmed that the sale of used cars by people who are not registered in the tax system is not subject to value added tax. Because it does not carry out an economic activity.
The authority clarified through the account “Ask Zakat, Tax and Customs” in response to a question by a citizen, in which he said, “If he buys a used car from an individual and not from an exhibition outside the Kingdom, is there a tax or just customs”, that the sale of used cars is subject to value-added tax if they are sold By a showroom or a person registered in the value-added tax system. As for the sale of a car from an unregistered individual who does not carry out an economic activity to another facility or individual, it is not subject to value-added tax.
She added that customs duties are imposed at 5% of the value of the vehicle, and value-added tax is calculated at 15% on the total value of the vehicle, along with customs duties in the cases due to it.
Dear Khaled, To clarify to you, customs duties are imposed at 5% of the value of the vehicle, and the value-added tax is calculated at 15% on the total value of the vehicle with customs duties.
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– Ask zakat, tax and customs (@Zatca_care) October 9, 2022