Used cars sold at auction subject to 15% VAT if seller is registered
Saudi tax authority clarifies that used cars sold at auction incur 15% VAT if the seller is VAT-registered, with margin scheme for eligible vehicles.
Key Takeaways
AIA query was submitted to the Zakat, Tax and Customs Authority by a follower, asking: "Peace be upon you. Are used cars sold at auction subject to tax?"
The authority responded via its 'Ask Zakat, Tax and Customs' account on X, stating that all goods and services are subject to a 15% value-added tax (VAT) if provided by a person registered in the VAT system.
View the post on X
It added that VAT is calculated at 15% on the final price of goods or services, and that the margin scheme currently applies only to eligible used cars.
The authority clarified that only those registered for VAT are eligible to apply the margin scheme.