The introduction of VAT is increasing costs for motorists in the UAE. Andrew Henderson/The National
The introduction of VAT is increasing costs for motorists in the UAE. Andrew Henderson/The National
The introduction of VAT is increasing costs for motorists in the UAE. Andrew Henderson/The National
The introduction of VAT is increasing costs for motorists in the UAE. Andrew Henderson/The National

How VAT affects car owners and sellers in the UAE


Alice Haine
  • English
  • Arabic

How much you pay to buy a new or second-hand car depends on whether you are buying from an agency, a dealer or an individual, according to a new guide for drivers released by ServiceMarket.com and CarSwitch.com.

“If you are purchasing a brand new car from the agency, or a pre-owned car registered under the agency or dealer, then you’ll have to pay 5 per cent VAT on the car’s value,” wrote Obed Suhail, a senior writer at ServiceMarket.com, a marketplace for home services.

However, how the tax is applied to that sale is still unclear, according to Mr Suhail, as it can either be applied to the recommended selling price or the actual invoiced amount, which could be a discounted figure.

“On the other hand, buyers of used cars still registered under the original owners but being sold through dealers will have to pay 5 per cent on the profit the car dealers are making,” said Mr Suhail.

Bill Carter, chief systems and innovation officer at Autodata Middle East, said if a dealer buys the car for Dh80,000 and spends Dh5,000, his costs are Dh85,000.

"He then sells for Dh100,000 and VAT is charged on the Dh15,000 profit, costing Dh750," said Mr Carter.

However, the best way to buy is direct from another consumer.

"There is no VAT if it is a consumer to consumer sale so we may see traders pretending to be consumers and selling through classified ads," said Mr Carter.

For that reason, it is better to buy direct from the original owner or through a car sales platform that enables transactions directly with the owner.

Last month, the Federal National Council (FNC) member Saeed Al Remeithi called for a cap to be placed on the rising cost of buying a car ahead of the introduction of VAT.

Mr Al Remeithi referred to an unspecified report that he said found the UAE has the steepest car prices in the Arabian Gulf.

“Today there is a lot of talk that the UAE has the highest prices in the Gulf, and with Value Added Tax ... there is a fear of inflation," he said during an FNC session.

Here are some other ways VAT affects motorists in the UAE:

Infographic by ServiceMarket.com
Infographic by ServiceMarket.com

Car loans

No VAT is applied to car loans or the related interest rates with most banks yet to alter rates on motor loans, according to the guide.

“This means the banks will absorb any application of VAT for the time being. However, bank loan processing fees, usually in the range of Dh500 to Dh1,500 are subject to 5 per cent VAT,” said Mr Suhail.

Annual renewal costs

While VAT is not applied to either car licence registration or inspection fees, the prices of both government services increased in December. The car licence renewal fee was increased by 17 per cent from Dh300 to Dh350, and the inspection fee went up by more than 20 per cent from Dh140 to Dh170, according to ServiceMarket.com and the car sales platform CarSwitch.com.

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Read more:

Almost half of UAE residents worried about increased living costs from VAT

UAE residents cut back ahead of VAT introduction

VAT in UAE: 20 free zones told they are exempt from levy

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Car insurance

VAT is applied to car insurance, so factor that increased cost into your budget. This is in addition to new regulations for the car insurance industry that were rolled out at the start of 2017. They included increasing the maximum liability for third-party damage from Dh250,000 to Dh2 million. This stipulation, along with other changes, increased the cost of car insurance policies across the board. Data from the comparison site yallacompare.com found that drivers in the UAE paid an average of 14.9 per cent more for their car insurance in 2017 than in 2016.

Consumption costs

UAE residents must also factor in higher consumption costs because VAT is applied to petrol, diesel and other oil and gas products at the pump. While Salik tags and recharge cards are exempt from VAT, as are parking fees, expect to pay VAT for both residential and commercial parking. If your residential rent includes charges for parking, then it will not apply to you.

Services and repairs

Car maintenance has also become more expensive as VAT applies to services such as oil changes as well as car repair services such as the purchase of spare parts. Car washing at the petrol station also has VAT applied.

The story in numbers

18

This is how many recognised sects Lebanon is home to, along with about four million citizens

450,000

More than this many Palestinian refugees are registered with UNRWA in Lebanon, with about 45 per cent of them living in the country’s 12 refugee camps

1.5 million

There are just under 1 million Syrian refugees registered with the UN, although the government puts the figure upwards of 1.5m

73

The percentage of stateless people in Lebanon, who are not of Palestinian origin, born to a Lebanese mother, according to a 2012-2013 study by human rights organisation Frontiers Ruwad Association

18,000

The number of marriages recorded between Lebanese women and foreigners between the years 1995 and 2008, according to a 2009 study backed by the UN Development Programme

77,400

The number of people believed to be affected by the current nationality law, according to the 2009 UN study

4,926

This is how many Lebanese-Palestinian households there were in Lebanon in 2016, according to a census by the Lebanese-Palestinian dialogue committee

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Defence review at a glance

• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”

• Prioritise a shift towards working with AI and autonomous systems

• Invest in the resilience of military space systems.

• Number of active reserves should be increased by 20%

• More F-35 fighter jets required in the next decade

• New “hybrid Navy” with AUKUS submarines and autonomous vessels

RESULT

Al Hilal 4 Persepolis 0
Khribin (31', 54', 89'), Al Shahrani 40'
Red card: Otayf (Al Hilal, 49')

Match info

Manchester City 3 (Jesus 22', 50', Sterling 69')
Everton 1 (Calvert-Lewin 65')

The specs

Engine: 2.9-litre twin-turbo V6

Power: 540hp at 6,500rpm

Torque: 600Nm at 2,500rpm

Transmission: Eight-speed auto

Kerb weight: 1580kg

Price: From Dh750k

On sale: via special order

if you go

The flights

Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes. 

The hotels

Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes. 

When to visit

March-May and September-November

Visas

Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.

David Haye record

Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4

Our family matters legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Hales' batting career

Tests 11; Runs 573; 100s 0; 50s 5; Avg 27.38; Best 94

ODIs 58; Runs 1,957; 100s 5; 50s 11; Avg 36.24; Best 171

T20s 52; Runs 1,456; 100s 1; 50s 7; Avg 31.65; Best 116 not out

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Ten10 Cricket League

Venue and schedule Sharjah Cricket Stadium, December 14 to 17

Teams

Maratha Arabians Leading player: Virender Sehwag; Top picks: Mohammed Amir, Imad Wasim; UAE players: Shaiman Anwar, Zahoor Khan

Bengal Lions Leading player: Sarfraz Ahmed; Top picks: Sunil Narine, Mustafizur Rahman; UAE players: Mohammed Naveed, Rameez Shahzad

Kerala Kings Leading player: Eoin Morgan; Top picks: Kieron Pollard, Sohail Tanvir; UAE players: Rohan Mustafa, Imran Haider

Pakhtoons Leading player: Shahid Afridi; Top picks: Fakhar Zaman, Tamim Iqbal; UAE players: Amjad Javed, Saqlain Haider

Punjabi Legends Leading player: Shoaib Malik; Top picks: Hasan Ali, Chris Jordan; UAE players: Ghulam Shabber, Shareef Asadullah

Team Sri Lanka Cricket Will be made up of Colombo players who won island’s domestic limited-overs competition

Some of Darwish's last words

"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008

His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.

Adele: The Stories Behind The Songs
Caroline Sullivan
Carlton Books

Results:

5pm: Maiden (PA) | Dh80,000 | 1,200 metres

Winner: Jabalini, Szczepan Mazur (jockey), Younis Kalbani (trainer)

5.30pm: UAE Arabian Derby (PA) | Prestige | Dh150,000 | 2,200m

Winner: Octave, Gerald Avranche, Abdallah Al Hammadi

6pm: Arabian Triple Crown Round 3 (PA) | Group 3 Dh300,000 | 2,200m

Winner: Harrab, Richard Mullen, Mohamed Ali

6.30pm: Emirates Championship (PA) | Group 1 | Dh1million | 2,200m

Winner: BF Mughader, Szczepan Mazur, Younis Al Kalbani

7pm: Abu Dhabi Championship (TB) | Group 3 | Dh380,000 | 2,200m

Winner: GM Hopkins, Patrick Cosgrave, Jaber Ramadhan

7.30pm: Wathba Stallions Cup (PA) | Conditions | Dh70,000 | 1,600m

Winner: AF La’Asae, Tadhg O’Shea, Ernst Oertel

Health Valley

Founded in 2002 and set up as a foundation in 2006, Health Valley has been an innovation in healthcare for more than 10 years in Nijmegen, the Netherlands.
It serves as a place where companies, businesses, universities, healthcare providers and government agencies can collaborate, offering a platform where they can connect and work together on healthcare innovation.
Its partners work on technological innovation, new forms of diagnostics and other methods to make a difference in healthcare.
Its agency consists of eight people, four innovation managers and office managers, two communication advisers and one director. It gives innovation support to businesses and other parties in its network like a broker, connecting people with the right organisation to help them further

Teams

India (playing XI): Virat Kohli (c), Ajinkya Rahane, Rohit Sharma, Mayank Agarwal, Cheteshwar Pujara, Hanuma Vihari, Ravichandran Ashwin, Ravindra Jadeja, Wriddhiman Saha (wk), Ishant Sharma, Mohammed Shami

South Africa (squad): Faf du Plessis (c), Temba Bavuma, Theunis de Bruyn, Quinton de Kock, Dean Elgar, Zubayr Hamza, Keshav Maharaj, Aiden Markram, Senuran Muthusamy, Lungi Ngidi, Anrich Nortje, Vernon Philander, Dane Piedt, Kagiso Rabada, Rudi Second

UAE currency: the story behind the money in your pockets
Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

Torque: 390Nm

Price: From Dh126,000

Available: Now

Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

INDIA'S%20TOP%20INFLUENCERS
%3Cp%3E%3Cstrong%3EBhuvan%20Bam%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fbhuvan.bam22%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%2016.1%20million%3Cbr%3EBhuvan%20Bam%20is%20a%2029-year-old%20comedian%20and%20actor%20from%20Delhi%2C%20who%20started%20out%20with%20YouTube%20channel%2C%20%E2%80%9CBB%20Ki%20Vines%E2%80%9D%20in%202015%2C%20which%20propelled%20the%20social%20media%20star%20into%20the%20limelight%20and%20made%20him%20sought-after%20among%20brands.%3Cbr%3E%3Cstrong%3EKusha%20Kapila%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fkushakapila%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%203.1%20million%3Cbr%3EKusha%20Kapila%20is%20a%20fashion%20editor%20and%20actress%2C%20who%20has%20collaborated%20with%20brands%20including%20Google.%20She%20focuses%20on%20sharing%20light-hearted%20content%20and%20insights%20into%20her%20life%20as%20a%20rising%20celebrity.%3Cbr%3E%3Cstrong%3EDiipa%20Khosla%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fdiipakhosla%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%201.8%20million%3Cbr%3EDiipa%20Khosla%20started%20out%20as%20a%20social%20media%20manager%20before%20branching%20out%20to%20become%20one%20of%20India's%20biggest%20fashion%20influencers%2C%20with%20collaborations%20including%20MAC%20Cosmetics.%3Cbr%3E%3Cstrong%3EKomal%20Pandey%3Cbr%3E%3C%2Fstrong%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fkomalpandeyofficial%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%201.8%20million%3Cbr%3EKomal%20Pandey%20is%20a%20fashion%20influencer%20who%20has%20partnered%20with%20more%20than%20100%20brands%2C%20including%20Olay%20and%20smartphone%20brand%20Vivo%20India.%3Cbr%3E%3Cstrong%3ENikhil%20Sharma%3C%2Fstrong%3E%3Cbr%3E%3Ca%20href%3D%22https%3A%2F%2Fwww.instagram.com%2Fnikkkhil%2F%3Fhl%3Den%22%20target%3D%22_self%22%3EInstagram%3C%2Fa%3E%20followers%3A%201.4%20million%3Cbr%3ENikhil%20Sharma%20from%20Mumbai%20began%20his%20online%20career%20through%20vlogs%20about%20his%20motorcycle%20trips.%20He%20has%20become%20a%20lifestyle%20influencer%20and%20has%20created%20his%20own%20clothing%20line.%3Cbr%3E%3Cem%3ESource%3A%20Hireinfluence%2C%20various%3C%2Fem%3E%3Cbr%3E%3C%2Fp%3E%0A
WE%20NO%20LONGER%20PREFER%20MOUNTAINS
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Inas%20Halabi%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENijmeh%20Hamdan%2C%20Kamal%20Kayouf%2C%20Sheikh%20Najib%20Alou%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A

Tour de France Stage 16:

165km run from Le Puy-en-Velay to Romans-sur-Isère

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3C%2Fstrong%3E%3A%20ASI%20(formerly%20DigestAI)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Quddus%20Pativada%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Artificial%20intelligence%2C%20education%20technology%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%243%20million-plus%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20GSV%20Ventures%2C%20Character%2C%20Mark%20Cuban%3C%2Fp%3E%0A
What are the influencer academy modules?
  1. Mastery of audio-visual content creation. 
  2. Cinematography, shots and movement.
  3. All aspects of post-production.
  4. Emerging technologies and VFX with AI and CGI.
  5. Understanding of marketing objectives and audience engagement.
  6. Tourism industry knowledge.
  7. Professional ethics.

THE SPECS

Engine: 1.6-litre turbo

Transmission: six-speed automatic

Power: 165hp

Torque: 240Nm

Price: From Dh89,000 (Enjoy), Dh99,900 (Innovation)

On sale: Now

Brief scores:

Toss: Kerala Knights, opted to fielf

Pakhtoons 109-5 (10 ov)

Fletcher 32; Lamichhane 3-17

Kerala Knights 110-2 (7.5 ov)

Morgan 46 not out, Stirling 40

Dirham Stretcher tips for having a baby in the UAE

Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:

• Buy second hand stuff

 They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.

• Get a health card and vaccinate your child for free at government health centres

 Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.

• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.

Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.

• Once baby is ready for solids, cook at home

Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

The Bio

Favourite holiday destination: Either Kazakhstan or Montenegro. I’ve been involved in events in both countries and they are just stunning.

Favourite book: I am a huge of Robin Cook’s medical thrillers, which I suppose is quite apt right now. My mother introduced me to them back home in New Zealand.

Favourite film or television programme: Forrest Gump is my favourite film, that’s never been up for debate. I love watching repeats of Mash as well.

Inspiration: My late father moulded me into the man I am today. I would also say disappointment and sadness are great motivators. There are times when events have brought me to my knees but it has also made me determined not to let them get the better of me.

TERMINAL HIGH ALTITUDE AREA DEFENCE (THAAD)

What is THAAD?

It is considered to be the US's most superior missile defence system.

Production:

It was created in 2008.

Speed:

THAAD missiles can travel at over Mach 8, so fast that it is hypersonic.

Abilities:

THAAD is designed to take out  ballistic missiles as they are on their downward trajectory towards their target, otherwise known as the "terminal phase".

Purpose:

To protect high-value strategic sites, such as airfields or population centres.

Range:

THAAD can target projectiles inside and outside the Earth's atmosphere, at an altitude of 150 kilometres above the Earth's surface.

Creators:

Lockheed Martin was originally granted the contract to develop the system in 1992. Defence company Raytheon sub-contracts to develop other major parts of the system, such as ground-based radar.

UAE and THAAD:

In 2011, the UAE became the first country outside of the US to buy two THAAD missile defence systems. It then stationed them in 2016, becoming the first Gulf country to do so.

MATCH INFO

Uefa Champions League, semi-final result:

Liverpool 4-0 Barcelona

Liverpool win 4-3 on aggregate

Champions Legaue final: June 1, Madrid

Notable cricketers and political careers
  • India: Kirti Azad, Navjot Sidhu and Gautam Gambhir (rumoured)
  • Pakistan: Imran Khan and Shahid Afridi (rumoured)
  • Sri Lanka: Arjuna Ranatunga, Sanath Jayasuriya, Tillakaratne Dilshan (rumoured)
  • Bangladesh (Mashrafe Mortaza)
'The Batman'

Stars:Robert Pattinson

Director:Matt Reeves

Rating: 5/5

Tailors and retailers miss out on back-to-school rush

Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”

A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.

“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”