Article 48 - Supply of used Goods

1) A Taxable Person may apply to account for Tax payable on a Supply of Eligible Used Goods using the profit margin method, subject to the conditions in this article.

The Taxable Person may not use the calculation method in this article until it has received notification from the Authority that it is approved.

2) For the purposes of this article, a Supply of Eligible Used Goods must meet all of the following criteria:

a) the Supply is that of used Goods situated in the Kingdom, and the Goods are of a type which the Authority has specified are eligible for Tax to be calculated using the profit margin method,

b) the Goods were purchased by the Taxable Person in a Supply made to the Taxable Person in the Kingdom by a Non-Taxable Person, by a Taxable Person outside of his Economic Activity, or by a Supplier applying the profit margin method in accordance with this article, in all cases where such Taxable Person did not deduct any Input Tax on his purchase of the Goods,

c) the Taxable Person meets the criteria stated in this article in respect of the purchase and supply of those Eligible Used Goods.

3) A Supply of Goods which are situated outside the Kingdom, or which move to or from the Kingdom as part of the supply to or supply by the Taxable Person, is not a supply of Eligible Used Goods.

4) Tax Invoices issued for Supplies of Eligible Used Goods by a Taxable Person must clearly refer to the Taxable Person’s use of the profit margin method, and must not show any amount of Tax charged in respect of any Supply.

5) In cases where a Taxable Person purchases the Eligible Used Goods from a Non-Taxable Person, the Taxable Person must issue an invoice in respect of the purchase to that Non-Taxable Person. This invoice must include:

a) the name, address and Tax Identification Number of the Taxable Person,

b) the name and address of the Non-Taxable Person,

c) the date of the purchase,

d) details of the Goods purchased, including any relevant registration number or other details which the Authority may specify,

e) the Consideration payable in respect of the purchase of the Goods.

6) The profit on a Supply of Eligible Used Goods is calculated as the Consideration for the Supply of the Eligible Used Goods by the Taxable Person, less the Consideration payable in respect of the purchase of the Eligible Used Goods. The profit does not include any expenses or other amounts incurred by the Taxable Person in respect of the Supply.

7) Tax is calculated on the profit in accordance with the method prescribed by article forty-five of these Regulations.

8) In cases where the profit calculated under the sixth paragraph of this article in respect of any Supply is zero, or results in a negative amount, the value of that Supply by the Taxable Person is zero.

9) A Taxable Person must not deduct Input Tax in respect of any amount of Tax charged to it or included in the Consideration for the purchase of Eligible Used Goods.

10) Any Taxable Person who elects to use the profit margin method to calculate Tax on any Supply of Eligible Used Goods must retain a record of all Eligible Used Goods purchased and supplied by that Taxable Person, for the period stated in article sixty-four of these Regulations and in addition to the records required to be retained by this article. In respect of each Supply of Eligible Used Goods, the record must contain:

a) all information detailed in the fifth paragraph of this article,

b) the number of the Tax Invoice issued by the Taxable Person for the Supply of the Eligible Used Goods,

c) the Consideration payable for the Supply of the Eligible Used Goods by the Taxable Person,

d) name and address of the Customer,

e) the profit calculated in accordance with the sixth paragraph of this article,

f) VAT due on the profit.

11) In cases where the Taxable Person has not complied with any of the requirements of this article in respect of any Supply of Used Goods, the profit margin method may not be used in respect of that Supply. In these cases, the Taxable Person must calculate Tax on the full Consideration for his Supply.