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The Zakat, Tax and Customs Authority (‘ZATCA’) has published a proposed criteria for ‘used cars’ to be classified as ‘eligible goods’ for applying profit margin method under Article 48 of the KSA VAT Implementing Regulations.
The proposed classification criteria has been published on the Public Consultation Platform of the National Competitiveness Center on 4 January 2023 - for public consultation.
Article 48 of the KSA VAT Implementing Regulation provides governing principle to account for tax payable on supply of ‘eligible used goods’ under the profit margin method by a taxable person.
This classification criteria has been issued by ZATCA under Article 48(2) a) of the Implementing Regulations that empowers ZATCA to specify goods that can be considered as eligible for applying profit margin method.
The following criteria for supply of used cars has been proposed to be met in order to apply the profit margin method:
Interested stakeholders and taxpayers are encouraged to express their opinion on this platform and share feedback on the proposed classification criteria no later than 30 January 2023.
The proposed classification criteria has been issued for public consultation and is not yet enforced. If approved, this will become binding for all relevant stakeholders.
The public consultation forum presents a unique opportunity for interested stakeholders to share views and highlight any improvement areas regarding the proposed classification criteria. Any feedback should be shared with ZATCA no later than 30 January 2023 through the prescribed channel.
Taxpayers who are engaged in purchasing/selling used cars and wish to find out more about the proposed classification criteria, feel free to reach out to us for support.
Middle East Tax & Legal Services Leader, PwC Middle East
Tel: +966 56 704 9675
Zakat and Tax Leader, PwC Middle East
Tel: +966 50 525 6796
Chadi Abou Chakra
Middle East Indirect Tax Network Leader, PwC Middle East
Tel: +966 11 211 0400 Ext: 1858
ITX Partner | TLS Middle East Consumer Markets leader, PwC Middle East
Tel: +966 54 110 0432
Partner, Indirect Tax, PwC Middle East
Tel: +966 54 033 7096
Partner, Indirect Tax , PwC Middle East
Tel: +966 56 367 9392