Saudi authorities clarify which cars are exempt from VAT
Taxable cars are only those sold off in showrooms, auctions
Abu Dhabi: While some car owners put a value-added tax of 15% on the cars they sell off outside the taxable showrooms, the Saudi Zakat and Income Authority confirmed, in response to an inquiry, that selling a used car from an unregistered individual, who does not run a business to another individual is not subject to VAT, local media reported.
According to the Zakat and Income Authority, taxable cars include vehicles sold off in auctions if the seller is carrying out an economic activity and cars sold off by showrooms or VAT registered businesses.
The 15% VAT was enforced as of July 1, but three months later in October, Saudi Arabia exempted property deals from the 15% VAT, as a Royal order instead imposed a 5% tax on real estate transactions.