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VAT Guide on Automotive sector in UAE

FTA has issued a guidance on Automotive Sector which about the VAT treatment of supplies made by motor vehicle dealers in the UAE including but not limited to the supply of new cars, the supply of used/ second-hand cars, supplies under warranty and the export and import of cars.


It should be noted that this guide is not intended to provide comprehensive details associated with VAT and is not intended for legal reference but as a framework discussing VAT issues relevant specifically to the automotive sector.


In this guide, FTA has provided a detailed information in relation to VAT treatment of the following business activities:

  1. Sale of cars within UAE
    • Outright sales of cars
    • Hire-purchase arrangements in relation to cars
    • Trade-ins of cars
    • Sale of cars to foreign governments, international organisations, diplomatic bodies and missions
  2. Sale of used/ pre-owned cars
  3. Lease of cars
  4. Export of cars
  5. Import of cars
  6. Warranty claims
  7. Auction of cars
  8. Promotions and discounts in relation to sale of cars
  9. Company cars and demo cars


You can refer to the guide attached here for detailed information with respect to the same [Automotive Sector – EN – 29 06 2021]


Spectrum Auditing team is well equipped to advise and take care of your requirements of Value Added Tax (VAT). Our passion and heart lie in serving the clients and we aim to keep client’s satisfaction as our primary motto. We are registered Auditors under the Ministry of Economy UAE and also registered Tax Agent from Federal Tax Agency UAE, Dubai providing dedicated Audit, Accounting, Tax services, Financial Advisory and Business Advisory Services complying regulatory requirements.


Reach us to have a frills free life in your journey in UAE. We at Spectrum will assist you in taking care of all the procedures involved in the VAT process. Call us today for any kind of assistance at +971 4 2699329 or email us at [email protected] to get all your queries addressed. Spectrum is your partner in your success.



Balaram Vuchidi

Managing Director
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