There is no VAT on the sale of a used vehicle if the seller is not registered with the VAT system.

The Saudi Arabian Zakat Tax and Customs Authority (ZATCA) has emphasized that used vehicle sales can only be subject to VAT (Value Added Tax) if they are sold by a showroom or a person who is registered with the VAT system.

The authority went on to say that selling a vehicle to another individual by someone who is not registered in the VAT system and does not engage in any business or economic activity is not subject to VAT.

According to the ZATCA, those who are registered in the VAT system are required to collect the tax and pay it to the authority, whereas those who are not registered in the VAT system are not permitted to collect or pay the tax to the authority.

According to the Zakat Tax and Customs Authority, anybody who engages in an economic or business activity whose annual income above the necessary limit of 375,000 Saudi Riyals is obligated to register with the VAT system.

People with annual incomes of more than 187,500 Saudi Riyals but less than 375,000 Saudi Riyals are eligible for voluntary registration, while those with annual revenues of less than 187,000 Saudi Riyals are not required to register for VAT.