VAT in UAE: Car and electronics retailers use deadline to spur sales before tax comes into effect

Digital marketing push to encourage purchases of big ticket items before 5 per cent duty comes into effect

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VAT in UAE: Car and electronics retailers use deadline to spur sales before tax comes into effect

UAE residents are receiving emails and text message on their mobiles promoting big ticket purchases of cars and flat-screen TVs before value-added tax (VAT) comes into effect.

On January 1, a 5 per cent levy will be applied on most goods and services in the emirates.

One promotion, from Al Tayer/Premier Motors, offers potential customers 5 per cent cash back if they buy before December 20 from the high-end Maserati line. Emails from online retailers have used the pre-VAT idea as well.

“I don’t think VAT will have an impact for me [buying or not buying],” said Dubai resident Omair Saya. “Things are going to become 5 per cent more expensive, but I wouldn’t go out of my way just to save that.”

The UAE and Saudi Arabia will introduce VAT first in 2018, eventually followed by other GCC members. The UAE Tax Authority has published a detailed list of how value-added tax (VAT) will be applied to certain goods and services.

Businesses meeting a Dh375,000 annual revenue threshold must be registered for VAT in advance of January 1 or face fines.

Last week, the finance ministry released a document detailing a list of violations that would be subject to monetary fines. First, only VAT-registered businesses have the right to charge customers the levy.

Items that will be subject to the VAT include cars, electronics, mobile plans and apparel, just to name a few. More info

By LeAnne Graves  thenational.ae