Al-Marsad Newspaper: The General Authority for Zakat, Tax and Customs has set criteria for classifying used cars as taxable goods using the profit margin method in accordance with Article (48) of the executive regulations of the value-added tax system.
The criteria put forward by the authority on the survey platform included:
The used car must be registered in the Kingdom
It must have been driven on the road for personal or work purposes
The used car must be suitable for reuse as it is in its condition, or following making some repairs or improvements to it, provided that it has not undergone modifications or repairs that altered its basic nature.
The supply must be made by a taxable person registered with the Authority and licensed to practice the activity of car trading according to a commercial registry or any similar license.
She clarified that the used cars that are eligible to be subject using the profit margin method do not include the following:
New cars (car registration and mileage for delivery to the customer does not mean that the car is used and applicable to the profit margin method)
Cars imported into the Kingdom, even if they were used outside the Kingdom, including the car received on behalf of the person
Any used car purchased by a taxable person who applies the profit margin method and for which a tax invoice has been issued showing that VAT has been calculated separately according to the normal rules for non-used goods.
