VAT FOR USED CARS
- Alexander M. Kappes
- Jan 23, 2018
- 1 min read
When VAT was implemented in the UAE, many frugal potential car buyers thought of buying a used car instead of a new one to avoid paying the VAT. Well, the bad news is that if you buy the used car from an agency or dealer, the VAT will still be implemented, Good news is if you buy it directly from the original owner, you won't have to pay the VAT given that the owner decides on the price and the transaction is private.
What about the bank? Do I still need to pay VAT?
Not on car loans installments or loan interest rate, however you will pay it on the processing fees.
What about annual costs such as registration?
There is no VAT to be paid on car license registration or inspection fees to test the car for passing.
What about the car insurance?
VAT is applied on insurance.
What about car servicing, car wash and and repair services?
Yes! These are not exempt of VAT.
What about Salik and parking?
There is no VAT on both.
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When you buy a used car, make sure to make all the calculations of future costs as you don't want to have them as a surprise.
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