The effect of value added tax on car rental industries is a matter of concern for around all the rental industries around Dubai. The automotive dealers are already managing the huge inventory levels in their vicinity, but now the car dealers have to pay the big value added tax, which has been initiated in the year 2018 January. Therefore, it has been said that 2018 will bring an activities flood in car markets before the prices of cars will rise and their actual demand will go down.
The year of 2016 has been a critical year for the automotive dealers and the reason for this is that the automotive industries had a low demand on new vehicles and the used vehicles were high in stock. However, it has been assumed that auto industry dealers will go through the same critical situation in 2018 also. By implementing value added tax, the living cost will increase and car purchasers might not be prepared to give VAT on vehicles that will ultimately lower the demand of vehicles.
Rent a car in Dubai has become complex because of value added tax. The manufacturers of car industry are getting high in number and due to that the competition is rising dramatically; therefore the demand of luxuries cars is decreasing. Most of the car industries are asking for the support of banks and they are trying to grab customer's attention with discounted offers on used cars which required low maintenance, also they are giving free insurance in the upcoming year.
The effect of VAT on rent a car is really obvious because it is directly giving its impression on it through the taxes. Most of the time, the value added tax on the car you are going to rent is automatically included in the rental price. It makes it easy for the customer because he/she doesn't have to pay any extra taxes and things are easier to understand. However, still there are few companies that are charging VAT out of the cost of renting a car.
It is obvious for any traveler who is planning to spend their vacations and going to have economy car rental in Dubai to read the contract carefully and focus on all the terms and conditions. If the contract has specific terms on VAT then the bearer have to pay it at the end. The major disadvantage of having a VAT tax on rented cars is that you cannot claim it back like you can claim the VAT on clothing, souvenirs and other things.
Dubai is famous for spending holidays therefore, if you are planning to visit Dubai with your family or with your friends then it is mandatory that you should know the actual fares, tax rate, basic transportation routes and specially the best car rental company. As for traveling the most important thing is to have a comfortable commute system and if the place is new then there is a high chance that people can make you fool by charging high amount for giving you a ride for a very short distance.
Martin Wynn
