The Zakat Tax and Customs Authority (ZATCA) in Saudi Arabia has clarified that the sale of the used vehicles can be subjected to VAT (Value Added Tax) only if it will be sold by a showroom or a person who is registered with VAT system.
The authority further clarified by stating that selling vehicle by an individual, who is not registered in the VAT system and who does not practice any business or economic activity, to another individual is not subject to Value Added Tax.
- The ZATCA explained that those who are registered in the VAT system are obligated to collect the tax and make payment to the authority, while the others who are not registered with VAT system are not entitled to collect and make payment of the tax to the authority.
- The Zakat Tax and Customs Authority pointed out that everyone who deals in an economic or business activity is required to register in the VAT system, if the annual revenues reach the mandatory limit of 375,000 Saudi Riyals.
- For people whose annual income is more than 187,500 but is below 375,000 Saudi Riyals, they are eligible for voluntary registration, while people whose yearly revenues are less than 187,000 Saudi Riyals are not obligated for VAT registration.
SOURCE : SAUDI EXPATRIATES
