The Saudi Zakat, Tax and Customs Authority decided that the value-added tax should be calculated on the profit margin of selling used cars, not on the total sale value.
According to a statement published by the authority via Twitter, it confirmed that it had added “the option of calculating the value-added tax on the profit margin of the sale of qualified used cars, without it being on the total sale value, starting from next July 1.”
According to the statement, the authority’s availability of this option comes within the framework of its endeavor to “reduce the value added tax on qualified used cars.”
The statement stipulated several conditions for applying this option, including that “the used car must be qualified by the authority, and the car must be present and previously used in Saudi Arabia,” and other conditions.
The authority published a statement of the method for calculating the value-added tax in the new way, explaining that it “applies to the difference between the purchase price and the selling price – the realized profit margin – instead of imposing it on the full amount of the consideration received.”
This article was originally published by RT.