By Mohamed Aboul Fotouh and Ahmed Farahat
The newly-issued tax accounting instructions were anounced because of the inconsistencies in tax treatment between industrial companies and used car dealers, and do not apply to the general public and ordinary citizens, Chairman of Central Department of Tax Examination Ali Sultan said.
Two ministerial resolutions will be issued for the both of them separately. Ordinary citizens who sell their used cars are not addressed within this new tax accounting, based on the lack of tax information about them. This will not apply on a regular basis and citizens will not be treated as merchants or industrial companies.
The Tax Authority issued new instructions on the examination of selling used cars, since accounting the activity of used cars trade has witnessed problems in applying tax treatment.
Sultan said the industrial companies that buy cars to use them as one of the company’s assets are subject to a 30% tax, besides the 10% original tax. Used car dealers, on the other hand, will be held accountable based on the difference between the purchase value of the used vehicle and its selling price. If the merchant bought the used car with a price that reaches up to EGP 100,000 and then sold it for EGP 110,000, then only the EGP 10,000 will be subject to tax.
