The Federal Tax Authority (FTA) made a recent announcement to clarify that the goods that were subjected to VAT before the supply in question will be eligible to be sold under the Profit Margin Scheme. Thus, the stock on hand of used goods which were acquired before the effective date of Federal Decree-Law No. (8) on VAT, or which have not previously been subject to VAT for other reasons, are not eligible to be sold under the profit margin scheme and VAT hence is due on such goods.
The Authority had clarified this at an awareness session recently organised at the Abu Dhabi Chamber of Commerce and Industry, which brought together several car dealers, experts and other stakeholders from the industry. The session was aimed at raising awareness among car dealers about the procedures and tax treatment for this vital sector, as well as the efforts made by the FTA to remove obstacles facing those working in the sector.