The UAE’s Federal Tax Authority (FTA) has revealed a list of goods and services that will be subject to value added tax (VAT) as of Jan. 1, 2018.
Selected supplies in sectors such as transportation, real estate, financial services will be completely exempt from VAT.
Meanwhile, certain government activities will be outside the scope of the tax system (and, therefore, not subject to tax). These include activities solely carried out by the government, as well as activities carried out by non-profit organisations.
The UAE Cabinet is expected to issue a decision to identify the government bodies and non-profit organisations that are not subject to VAT, the FTA said.
Below is a list of some of the goods and services subject to VAT in the UAE:
|
VAT Treatment on Selected Industries |
|
|
Education |
VAT rate |
|
Private and public school education (excluding higher education) and related goods and services provided by education institution |
0% |
|
Higher education provided by institution owned by government or 50% funded by government, and related goods and services |
0% |
|
Education provided by private higher educational institutions, and related goods and services |
5% |
|
Nursery education and pre-school education |
0% |
|
Healthcare |
|
|
Preventive healthcare services including vaccinations |
0% |
|
Healthcare services aimed at treatment of humans, including medical services and dental services |
0% |
|
Other healthcare services that are not for treatment and not preventive (e.g. elective, cosmetic, etc) |
5% |
|
Medicines and medical equipment as listed in Cabinet Decision |
0% |
|
Medicines and medical equipment not listed in Cabinet Decision |
5% |
|
Other medical supplies |
5% |
|
Oil and Gas |
|
|
Crude oil and natural gas |
0% |
|
Other oil and gas products including petrol at the pump |
5% |
|
Transportation |
|
|
Domestic passenger transportation (including flights within UAE) |
Exempt |
|
International transportation of passengers and goods (including intra-GCC) |
0% |
|
Supply of a means of transport (air, sea and land) for the commercial transportation of goods and passengers (over 10 people) |
0% |
|
Supply of goods and services relating to these means of transport and to the transportation of goods and passengers |
0% |
|
Real estate |
|
|
Sale and rent of commercial buildings (not residential buildings) |
5% |
|
First sale/rent of residential building after completion of construction or conversion |
0% |
|
Sale/rent of residential buildings subsequent to first supply |
Exempt |
|
Hotels, motels and serviced accommodation |
5% |
|
Bare land |
Exempt |
|
Land (not bare land) |
5% |
|
Financial services |
|
|
Margin based products (products not having an explicit fee, commission, rebate, discount or similar) |
Exempt |
|
Products with an explicit fee, commission, rebate, discount or similar |
5% |
|
Interest on forms of lending (including loans, credit cards, finance leasing) |
Exempt |
|
Issue, allotment or transfer of an equity or debt security |
Exempt |
|
Investment gold, silver and platinum, jewellery |
|
|
Jewelry |
5% |
|
Insurance and Reinsurance |
|
|
Insurance and reinsurance (including health, motor, property, etc) |
5% |
|
Life insurance and life reinsurance |
Exempt |
|
Food & Beverages |
|
|
Food and beverages |
5% |
|
Telecommunications and electronic services |
|
|
Wired and wireless telecommunications and electronic services |
5% |
|
Other |
|
|
Export of goods and services to outside the GCC implementing states |
0% |
|
Second hand goods (e.g. used cars sold by retailers), antiques and collectors’ items |
5% of the profit margin |
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