5% VAT to be paid on car maintenance in the UAE

5% VAT to be paid on car maintenance in the UAE

 

Car maintenance services such as repairing services, car washes and oil changes, is subject to the new 5% VAT in 2018. Dilip Jain, Principal VAT at Nimai Management Consultants, said that the car owners in the UAE will need to pay more for the maintenance services as well as for petrol.

Car parking when its provided as part of the renting out of a residential property, will be exempt from VAT; but in commercial buildings, RTA parking building, will attract the five per cent VAT.

RTA car parking, as its a part of the public transport system, is likely to be exempt, but clarification is awaited on the matter. VAT rates are related to business activity, not the end users. Hence the VAT rates for commercial and individual vehicles will be the same.

Girish Chand, director MCA Management Consultants pointed out that VAT on petrol and diesel would have a negligible impact in the overall spending of an individual considering the low VAT rate and the insignificant composition.