ZATCA began on Saturday, 1 July 2023 to provide the option of calculating VAT on Profit Margin for “qualified Used Cars" selling, targeting Taxpayers who hold a license or commercial register to engage in car trading activities, such as car dealerships and showrooms for the purpose of VAT and according to particular conditions.

ZATCA clarified that applying the Profit Margin mean is not mandatory, as the tax can be applied to the full amount due in accordance with the current applied method. Moreover, ZATCA illustrated that one of the most important conditions to be met to use the profit margin method is to be categorized by ZATCA as “Qualified Used Car", and the car exists and has already been used within the Kingdom of Saudi Arabia, the seller shall be registered with ZATCA for VAT Purposes and holds a license for commercial register to engage in car trading activities. This in addition to the need for the licensed trader to obtain the approval of ZATCA to be considered eligible to apply the profit margin method on qualified used cars.

Zakat, Tax and Customs Authority invites you to contact with ZATCA in if you have any inquiries on how to calculate the profit margin method on qualified used cars, via the 24/7 unified call center number (19993), or through X Account (@Zatca_Care), e-mail (info@zatca.gov.sa), or instant messaging through ZATCA's website (zatca.gov.sa).​