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VAT Can be Excluded in This Situation

The official VAT account of the General Authority for Zakat and Income stated that selling a used car by a person who is not registered in the VAT system and does not practice an economic activity for another person is not subject to VAT.


The account clarification came in response to a question from a person. He deliberately dealt with the type of transaction made to buy and sell used cars without owning an establishment or a commercial register for the value-added tax system.

The account stated in its response that buying and selling used cars is subject to value-added tax if they are sold from a dealer or a person registered in the VAT system while selling a car from an individual who is not registered and does not practice economic activity to another individual is not subject to VAT.

It is noticeable that Saudi Arabia imposed VAT in 2017 at 5%, and the rate has increased to 15% in 2020.

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