VAT Will Increase Motor Premiums in UAE
- Vehicle insurance bills in UAE will go up for the second consecutive year from January 2018, following a 5% VAT on their motor insurance
- Most vehicle owners in UAE have been paying higher premiums in 2017 after new changes to the tariff system mandated by the UAE Insurance Authority
- The VAT laws as well as an excise tariff that the UAE is expected to publish soon may increase consumer prices by an average 1.4%
- For some categories of vehicles, annual premiums have gone up by as much as 40% after insurers adjusted their pricing structure to comply with the new tariff in UAE
- Value Added Tax (VAT) is a general consumption tax that is added to products and services at every stage of its production, which differs in value from country to country
- VAT of 5% will be introduced in UAE from 1st January, 2018
- With the introduction of VAT, the cost of property and health insurance premiums may go up by 5% in the UAE, the largest insurance market in the GCC
- The modern variation of VAT was first implemented by France in the 1950s
- VAT is designed to tax only the value added by a business on top of the services and goods it can purchase from the market
