VAT law is as dynamic as the world we live in!
You may be an industry leader, but within your industry financial rules and laws can change.
At ITC we assist organizations with their financial issues across various industries.
We believe knowledge grows as you share it, and so we created pointers of VAT Law for Automotive companies.
1.VAT is charged on the following but is not limited to the sales of new and used cars, car parts, and service center services, warranties, etc.
2.Businesses that make taxable supplies, including zero-rated supplies in UAE, are required to register for VAT if they reach or are expected to reach the threshold of AED 375,000 in 12 months. If a business reaches the threshold of AED 187,500, then they have the choice to register.
3.Businesses are required to have tax invoices for all standard-rated supplies. It can be a simplified tax invoice if it is for an unregistered company or if the registered recipient’s amount is AED 10,000 or less. If the VAT is charged with the reference to the profit margin scheme, it must include that information and all the other information except the tax amount.
4.Businesses can recover all inputted taxes, except blocked items.
5.If you give giveaways or goods to customers for free and if that amount does not exceed more than AED 500 per person in 12 months, and if the output tax is not more than AED 2000, then these are considered as deemed supplies.
6. Repair service and parts under warranty are not subjected to VAT unless there is no other amount paid.
7. If a repair or a maintenance service is given to an entity based outside of the UAE, they must still be charged VAT.
If you need any clarification, our VAT experts will be happy to assist you!