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 ability to calculate value-added tax on the profit margin from the sale of qualified used vehicles, without taking into account the total value of the sale, starting next July 1.”
#Zakat _ and _ tax _ and _ customs Provides the ability to calculate VAT on the profit margin from the sale of “suitable used vehicles”.
????| https://t.co/HWUL1E6jRu#zatkarice.twitter.com/1uPj8tbXZ3
– Zakat, Tax and Customs Service (@Zatca_sa) May 19, 2023
According to the statement, the authorities’ availability of this option is due to its 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 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 entire amount of the consideration received.”
How is VAT calculated after applying the rate of return for qualifying used vehicles?#zatkarice.twitter.com/owBv7nIovJ
– Zakat, Tax and Customs Service (@Zatca_sa) May 19, 2023
Source: RT
