UAE Car Tax 2026: 5% VAT + Customs Duty + Salik Toll Guide

April 29, 2026 in Dubai, UAE — The UAE applies a relatively straightforward vehicle tax system compared to many countries: 5% customs duty on imports and 5% VAT on the total cost. However, with vehicle prices in the AED 100,000-500,000 range for many new cars, even a 10% combined tax adds AED 10,000-50,000 to every purchase. This guide covers all costs from import to daily driving.

UAE Vehicle Tax Overview

The UAE imposes two main purchase-related taxes on vehicles:

Customs duty: 5% of CIF (Cost, Insurance, Freight) import value
VAT (Value Added Tax): 5% of the total including customs duty

The UAE does not have an annual vehicle road tax like many countries. Instead, vehicle costs are concentrated at the point of purchase with no recurring ownership tax.

Customs Duty: 5% on Import Value

Customs duty is charged on the CIF (Cost, Insurance, Freight) value — the vehicle price including the cost of shipping and insurance to bring it to a UAE port. This prevents under-invoicing to avoid duty:

Vehicle Wholesale Price	Shipping + Insurance	CIF Value	5% Customs Duty
AED 100,000	AED 5,000	AED 105,000	AED 5,250
AED 200,000	AED 8,000	AED 208,000	AED 10,400
AED 350,000	AED 12,000	AED 362,000	AED 18,100
AED 500,000	AED 15,000	AED 515,000	AED 25,750

Dealers typically include the customs duty in their pricing — but always ask for the full landed cost breakdown to understand what you are actually paying.

VAT: 5% Applied to Total Cost

VAT was introduced in the UAE on January 1, 2018 at 5%. It is charged on the total of the vehicle price plus customs duty:

VAT = (Vehicle Price + Customs Duty) x 5%

Vehicle Price	5% Customs Duty	VAT on Total	Total Tax
AED 100,000	AED 5,000	AED 5,250	AED 10,250
AED 200,000	AED 10,000	AED 10,500	AED 20,500
AED 350,000	AED 17,500	AED 18,375	AED 35,875
AED 500,000	AED 25,000	AED 26,250	AED 51,250

The total tax rate is approximately 10.25% of the pre-tax vehicle price — making a AED 500,000 car cost approximately AED 551,250 before registration.

Salik: Dubai's Road Toll System

Dubai's Salik system charges AED 4 per trip through each toll gate. Currently, there are Salik gates at:

Al Barsha
Al Safa
Al Mamzar (north and south)
Jebel Ali
Al Garhoud

When you pass through any Salik gate, AED 4 is automatically deducted from your Salik tag account. You must maintain a minimum balance of AED 100. Salik tags are available for AED 120 (including AED 100 balance) from petrol stations, supermarkets, and online.

Abu Dhabi does not have road tolls — driving in Abu Dhabi is toll-free. Ras Al Khaimah and other northern emirates also have no road tolls.

Vehicle Registration Costs

Registration costs vary by emirate:

Emirate	New Registration	Annual Renewal	Transfer Fee
Dubai	AED 420-1,000	AED 420-800	AED 350-700
Abu Dhabi	AED 350-900	AED 350-800	AED 300-600
Sharjah	AED 300-800	AED 300-700	AED 250-500

Registration fees in Dubai are typically calculated as a percentage of the vehicle value (approximately 0.3-0.5%) for newer vehicles. Registration is annual — you must renew every year before your registration expiry.

Total Cost Examples

Cost Component	AED 150,000 Car	AED 300,000 Car	AED 600,000 Car
Vehicle price	AED 150,000	AED 300,000	AED 600,000
Customs duty (5%)	AED 7,500	AED 15,000	AED 30,000
VAT (5%)	AED 7,875	AED 15,750	AED 31,500
Registration (first year)	AED 420	AED 600	AED 1,000
Plate number fee	AED 350	AED 400	AED 1,200
Insurance (annual)	AED 2,500	AED 3,500	AED 6,000
Total above car price	AED 18,645	AED 35,250	AED 69,700
On-road price	AED 168,645	AED 335,250	AED 669,700

Dubai Number Plate Costs

Standard registration plates (randomly assigned) are included in registration fees. However, fancy/special plates can cost significantly more:

Standard plates: Included in registration (AED 350-1,200 depending on type)
Custom plates (single number): AED 10,000-100,000+
VIP/fancy plates: AED 100,000-1,000,000+ at auction

Most buyers use standard plates included in registration. Number plate auctions in Dubai attract international attention for unique number combinations.

Conclusion

UAE vehicle costs add approximately 10.25% above the listed price through customs duty (5%) and VAT (5%). On a AED 300,000 car, expect to pay AED 335,250 on the road including taxes and registration. There is no annual road tax — only registration renewal fees. Salik adds AED 4 per toll crossing in Dubai, with no tolls in other emirates. Use our UAE Car Tax Calculator to estimate your total on-road cost.

Disclaimer: Tax rates based on UAE Federal Tax Authority and Dubai Customs data as of April 2026. Confirm current rates with your dealer and the relevant emirate traffic authority before purchasing.

Official Resources: UAE Federal Tax Authority | Dubai Customs | Dubai RTA Salik

Questions

How much is customs duty on cars in the UAE?

The UAE applies a 5% customs duty on the CIF (Cost, Insurance, Freight) value of all imported vehicles. This is calculated on the vehicle price including shipping and insurance to bring it to a UAE port. For a car with a wholesale value of AED 150,000 and AED 5,000 shipping/insurance, customs duty is AED 155,000 x 5% = AED 7,750.

Is VAT charged on cars in the UAE?

Yes. The UAE introduced 5% VAT (Value Added Tax) on January 1, 2018. VAT is charged on the total cost including the customs duty. So for a car with AED 150,000 base price and AED 7,500 customs duty (5%), the VAT is AED 157,500 x 5% = AED 7,875. Total tax on a AED 150,000 car is approximately AED 15,375.

What is Salik toll in Dubai and how much does it cost?

Salik is Dubai's electronic toll gate system. Each time you pass through a Salik toll gate, AED 4 is deducted from your Salik account. Salik tags are available at petrol stations and online. You must maintain a minimum balance of AED 100 in your Salik account. Salik is free in Abu Dhabi and other emirates.

How much is vehicle registration in the UAE?

Vehicle registration in the UAE varies by emirate. Dubai registration for new vehicles is approximately AED 420-1,000 depending on the vehicle value. Abu Dhabi registration fees are similar. Registration is valid for one year and must be renewed. Transfer of ownership costs approximately AED 350-700 depending on the emirate.

Are there any excise taxes on cars in the UAE?

The UAE does not apply excise tax (which is used for tobacco, sugary drinks, etc.) to passenger vehicles. However, some SUV and large-engine vehicles may attract different insurance premiums. The main taxes remain customs duty (5%) and VAT (5%) with no additional excise on vehicle purchases.

Can I avoid customs duty by buying locally in the UAE?

No. Customs duty applies to all vehicles imported into the UAE regardless of where they are purchased. Cars assembled or manufactured in the UAE (very few) still face customs duty on imported components. However, UAE-manufactured vehicles like certain Toyota models assembled locally may have a different calculation.

What is the total cost for a AED 300,000 car in the UAE?

For a AED 300,000 car: Customs duty (5%) = AED 15,000, VAT on AED 315,000 (5%) = AED 15,750, Registration (Dubai, approx) = AED 600, Plate fee = AED 350-1,200. Total additional costs = AED 31,700-32,600. Total with car = AED 331,700-332,600. Annual registration renewal = AED 420-800.

Do electric cars get tax benefits in the UAE?

The UAE has no specific EV tax exemption for customs or VAT. EVs pay the same 5% customs duty and 5% VAT as petrol/diesel cars. However, EVs have lower fuel costs (electricity is heavily subsidised) and reduced running costs. The Dubai Electricity and Water Authority (DEWA) offers free or reduced-cost home charging installation for EVs.