Riyadh—The Zakat, Tax, and Customs Authorities clarified on Monday that used vehicle sales are subject to value-added tax (VAT) only when sold by a showroom or a registered person in the VAT system.
The authority stated that selling a vehicle by an individual not registered in the VAT system and not engaged in an economic activity to another individual is not subject to VAT.
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The authority clarified that all those registered in the value-added tax system must collect and pay the tax to the authority. In contrast, persons not registered in the system are not required to collect and pay the tax to the authority.
Notably, if annual revenues reach the mandatory limit of SR375,000, everyone who engages in any economic activity must register in the value-added tax system.
Persons with an annual income exceeding SR187,500 but below SR375,000 are required to register voluntarily, while persons with annual revenues less than SR187,500 are not obligated for VAT registration.
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