How UAE Motor Dealers Can Automate VAT Compliance

04 Oct 2022 Helpful Tips

Since inception in 2018, VAT has been a constant frustration for many car dealers in the UAE. The reason why VAT is so confusing for Motor Dealers is because it greatly differs from general, everyday VAT. Making one mistake throughout the VAT Compliance process can result in large compliance fines and loss of dealer license.

To reduce the risk of making a VAT compliance mistake, Motor Dealers in the UAE need to implement solutions that automate calculations and generate reports for quick submission to the FTA.

Different VAT Rules Apply for UAE Car Dealership's

  • You cannot sell a vehicle on the profit margin scheme if you do not have proof that the VAT was previously paid on that vehicle.
  • You must charge 5% on the sale of a vehicle if VAT has never been paid on that vehicle.
  • You cannot claim an input credit for VAT on the purchase of a vehicle unless you have a tax invoice from the seller that clearly states a full 5% was charge to you.
  • All documentation for every transaction must be kept for a period of? years.

Tracking and ensuring this is done correctly is a massive job and should not be underestimated.

There are 3 Options to Determine VAT:

  1. “Tax Inv Provided”
  2. “Calculate on Profit Margin” if proof VAT was previously paid
  3. “No VAT” if VAT was never paid on this vehicle

How to automate VAT compliance in the UAE?

EasyCars Dealer Management Software is a UAE Motor Industry specific, management software that automates the VAT compliance process for Motor Dealers. The benefit of using EasyCars is dealers do not need to fully understand VAT, the software will complete it for you.

In the click of a button, Motor Dealers in the AUE can quickly calculate complex VAT calculations, sync to accounting platform Xero and generate reports for FTA submission.

Some of the features include:

  • Automatically calculates complex VAT
  • Generates Reports for Submission to the FTA
  • Ability to create & email a bank/finance quote with attached documents such as customer ID’s
  • Ability to print Commission invoices for consignor, now excluding extras.
  • Integration of Algodriven vehicle data for more consistent matches on GCC vehicles
  • New Stock document category to ensure VAT compliance is followed & necessary documents can be retrieved for auditing purposes.
  • VAT document control reporting features.

Using innovative technologies, EasyCars calculates the most complex Car Dealer VAT Only and helps keep dealers compliant.

How EasyCars does it?

Watch our no-obligation free webinar hosted by Alpha Pro Partners to see how EasyCars Automates VAT calculations.

Disclaimer: This article is general and cannot be used for specific situations. It is the opinion of the author only. We recommend you get professional accounting and tax advice before acting on its contents.

About EasyCars,

EasyCars by Jeal is a UAE Motor Industry Specific, Dealer Management Software that automates the daily tasks of running a motor dealership. Using the latest technologies, EasyCars removes frustrations experienced at the dealership - opening the doors to future growth.

EasyCars features include Simple Stock Management, Automated Advertising, Automatic VAT Calculations, Xero Accounting Integration, Facebook Automotive Inventory Ads, Dealer Websites and Business Reporting in the one central management software.

To learn more about EasyCars or to arrange a no-obligation free demo of the software, please submit the form below.