Challenges

The United Arab Emirates is one of the leading markets with a high number of motor vehicles per capita in the world, facing one of their biggest challenges that is the implementation of the VAT. The import and export of automobiles are subject to VAT regulations, however these vary across regions of origin. Moreover, tax implementation for private vehicles as compared to public would be different.

As for its calculation, businesses in this industry face complications in calculating their tax and look for companies that could handle it for them. Businesses might become applicable for tax returns or exemptions, however, being unaware they would not be able to utilize them.
Furthermore, there is a requirement to handle the fierce competition by structuring the business to reduce operating costs and increase systematic compliance. With a number of brands and dealerships competing it has become difficult to drive revenue while controlling costs.