Public parking still looks to be VAT exempt, but there could be an extra 5 per cent on parking in your office or apartment building…

Earlier this month the Federal Tax Authority released a comprehensive list of what goods and services will and won’t be seeing a 5 per cent tax increase once the VAT kicks in on January 1 2018.

The rundown included everything from a blanket 5 per cent hike across all food and beverages to an exemption for private and public school fees.

One area that was omitted from the list, however, was parking – something that concerns (and ultimately costs a lot of money for) many of the country’s residents.

*Here is everything that will be subject to VAT (and everything that won’t be)*
*Everything that residents need to know about VAT in the UAE*

The Khaleej Times has published a story which offers some clarification towards what kinds of parking may be affected by the incoming value added tax.

It appears that while public parking is likely to remain exempt of VAT (although this has still yet to be confirmed by the government) there are a few other areas where it could be applicable.

Chiefly, this could be the case if you live in an apartment building and are not given a parking space as part of your tenancy lease. According to the experts cited in the article, if parking is charged separately and in addition to your rent then VAT is applicable.

The same goes for anyone who pays for parking in a commercial or office building. Don’t have a company parking space but still want to park in your office building? Be prepared to pay VAT on it.

The article also goes on to say that buildings dedicated solely to parking (i.e. parking garages) will also be charging VAT from the new year.

We suggest looking over your tenancy contract and speaking with your agent or landlord to see if the VAT will apply to you.

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