UAE: Motor premiums to rise with imposition of VAT

Source: Middle East Insurance Review | Oct 2017

Motorists in the UAE will see their vehicle insurance bills go up for the second consecutive year from January 2018 following the addition of an expected 5% value-added tax (VAT) on their motor insurance, said media reports.

Tax experts and insurers said that since everything other than life insurance would bear VAT, the cost of property and health insurance premiums may also go up by 5% in the UAE, according to the Khaleej Times.

Most vehicle owners have been paying higher insurance premiums from the start of this year following changes to the tariff system mandated by the UAE Insurance Authority.

For some categories of vehicles, annual premiums had increased by as much as 40% after insurers adjusted their pricing structure to comply with the new tariff.

Overall, 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%. M

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