The Impact of VAT in UAE CAR MARKET in 2018 Buying a car in the UAE is a big decision because along with the purchase price is attached a load of expenses like insurance, fuel, maintenance, parking fees, etc. To make things even more complicated for the UAE nationals, the authorities have now imposed Value Added Tax (VAT). VAT came into effect from 1 st January 2018 in UAE at a 5% standard rate. Ever since then the UAE car market has been buzzing the VAT debates. Let’s see how VAT is currently impacting the car market 2018. VAT Application in UAE Car Supermarket VAT charges depend on the source from which you are buying the car, that is, whether it is from a dealer or a car owner directly. If you are buying a car from a registered car dealing agency, then 5% VAT will be applicable on the car’s purchase price. As for buying a used car in UAE, which is sold through a registered dealer, 5% charges will be applicable on the profit margin of the transaction.