Home » News » Find out the details of the taxable used car standards using the profit margin method… and excluding 3 cases

Find out the details of the taxable used car standards using the profit margin method… and excluding 3 cases

Al-Marsad Newspaper: The General Authority for Zakat, Taxation and Customs established the criteria for classifying used cars as taxable goods using the profit margin method in accordance with Article (48) of the Tax System Executive Regulation on added value.

The criteria proposed by the authority on the survey platform included:

The used car must be registered in the UK

Must have been driven on the road for personal or business reasons

The used car must be suitable for reuse as it is in its condition, or after having made some repairs or improvements, provided that it has not undergone modifications or repairs that have altered its fundamental nature.

The transfer must be carried out by a taxable person registered with the Authority and authorized to carry out the activity of buying and selling motor vehicles according to a commercial register or other similar licence.

He clarified that used cars that may be subject using the profit margin method do not include the following:

New cars (car registration and mileage for customer delivery does not mean that the car is used and applicable to the profit margin method)

Cars imported into the Kingdom, even if used outside the Kingdom, including the car received on behalf of the person

Any used car purchased from a taxable person applying the profit margin method and for which a tax invoice has been issued showing that the VAT has been calculated separately under the normal rules for unused goods.

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