Okaz, 1 July 2023: The Zakat, Tax, and Customers Authority (ZACTA) has started allowing car dealers to calculate VAT on the profit margin of selling refurbished used cars. ZATCA is targeting licensed individuals who have a permit to operate car dealing shops in this respect.

The Authority explained that this method was not mandatory as it was possible to calculate VAT based on the full amount due for the car as it is the case currently.

The VAT on the fringe method can be applied when the car is classified as refurbished used cars by the authority and the car was in the Kingdom and has been used in the Kingdom before.

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