ZATCA to levy VAT on profit margins from qualified used cars from July 1

Logo of Zakat, Tax and Customs Authority (ZATCA) 

The Zakat, Tax and Customs Authority (ZATCA) approved levying value-added tax (VAT) on profit margins from qualified used cars, excluding the total sale value, as of July 1.

In a statement, ZATCA said that the VAT levy based on the profit margins method is part of its efforts to reduce VAT on qualified used cars. This methodology targets car showrooms registered with ZATCA for VAT purposes.

To apply VAT based on the profit margins method, certain conditions should be satisfied. Vehicles should be classified as qualified used cars and should be previously used inside the Kingdom. Sellers must be registered with ZATCA for VAT purposes.