AutoSmart GuidebooksWhat this guidebook covers
Every car a UAE dealer sells is a VAT transaction, alongside parts and service, often across several entities. From 14 April 2026, unpaid tax costs 14% a year, charged monthly, and a repeat record-keeping breach costs AED 20,000.
This guidebook covers the 5 tax standards every dealer group should audit, with 13 checkpoints: tax invoices, returns filed and paid on time, the used car margin scheme, records, and corporate tax and e-invoicing readiness.
The 5 tax standards
Open a standard to see the law behind it, what is checked, what it can cost and the evidence. Ideal fix times are counted from audit submission.
TX-01Tax invoices correct7 days
- The law
- Federal Decree-Law 8/2017 (VAT) · Federal Decree-Law 47/2022 (Corporate Tax) · Cabinet Decision 129/2025 (penalties, from 14 Apr 2026) · VAT law tax invoice requirements
- What we check
- Every sale, service and parts invoice is a valid tax invoice: TRN, date, description, VAT amount in AED, issued within 14 days.
- What it can cost
- Penalties per invoice, plus assessments on under-declared VAT.
- Evidence
- Invoices
TX-02Returns filed and paid on timeImmediate
- The law
- Federal Decree-Law 8/2017 (VAT) · Federal Decree-Law 47/2022 (Corporate Tax) · Cabinet Decision 129/2025 (penalties, from 14 Apr 2026) · Cabinet Decision 129/2025 late payment penalty
- What we check
- VAT returns are filed and paid by the 28th after each tax period. Corporate tax returns are filed within 9 months of the year end.
- What it can cost
- 14% a year on unpaid tax, charged monthly, plus late filing penalties.
- Evidence
- Portal screenshots
TX-03Used car margin scheme30 days
- The law
- Federal Decree-Law 8/2017 (VAT) · Federal Decree-Law 47/2022 (Corporate Tax) · Cabinet Decision 129/2025 (penalties, from 14 Apr 2026) · VAT law profit margin scheme for used goods
- What we check
- Used cars sold under the profit margin scheme meet its conditions (bought without VAT recovery, records of purchase and sale price), and VAT is calculated on the margin correctly.
- What it can cost
- Wrong use means VAT on the full price, plus penalties.
- Evidence
- Margin workings
TX-04Records kept30 days
- The law
- Federal Decree-Law 8/2017 (VAT) · Federal Decree-Law 47/2022 (Corporate Tax) · Cabinet Decision 129/2025 (penalties, from 14 Apr 2026) · Record keeping (at least 5 years; longer for real estate)
- What we check
- Invoices, contracts, import documents and accounting records are kept for at least 5 years and can be produced when the FTA asks.
- What it can cost
- AED 1,000, then AED 20,000 for a repeat within 24 months.
- Evidence
- Retrieval test
TX-05Corporate tax and e-invoicing ready30 days
- The law
- Federal Decree-Law 8/2017 (VAT) · Federal Decree-Law 47/2022 (Corporate Tax) · Cabinet Decision 129/2025 (penalties, from 14 Apr 2026) · Corporate tax registration and returns · UAE e-invoicing programme (phased rollout)
- What we check
- Every group entity is registered for corporate tax, returns are filed, transfer pricing between group companies is documented, and systems are being prepared for e- invoicing.
- What it can cost
- Late CT registration and returns carry fixed penalties, and e-invoicing gaps will bring more.
- Evidence
- Registrations + plan
How to run a UAE VAT and corporate tax audit, step by step
- Confirm what applies. List every entity with its VAT and corporate tax registration, and check the e-invoicing timeline for its size.
- Walk the site, standard by standard. Score each of the 13 checkpoints Pass, Fail or N/A. N/A only where the standard rules it out, with the reason recorded. Sample new car, used car, parts and service invoices, and check used cars on the margin scheme didn't also recover input VAT.
- Capture the evidence. A pass counts only with proof captured at the time of the audit: tax invoices, filed returns and payment dates, margin scheme workings and record retention.
- Give every fail an owner and a fix time. Record what you saw and who owns the fix. Each standard carries an ideal fix time, from immediate to 30 days, counted from audit submission (see the table above).
- Fix it, then prove it. The site fixes the cause and uploads proof of closure; the auditor checks the proof before closing the finding.
- Re-check at the next audit. Confirm closed findings stay closed, and look for the same fail at your other sites so one gap doesn't repeat across the network.
Who this guidebook is for
- Dealer principals and GMs
- Finance managers
- Auditors
A reference document, not legal advice. Fines and rules change: check the current text with the regulator or your legal adviser before acting.
