UAE VAT Rates- Handbook

Tally Solutions | Updated on: May 13, 2021

Introduction
UAE VAT Rates

Introduction

The UAE has implemented VAT on 1st January, 2018. Majority of goods and services supplied will be taxed @ 5%, which is the lowest VAT rate in the world. Additionally, certain supplies are taxable @ 0%, few supplies are exempt and others are kept out of the scope of VAT.

This ready reckoner will assist you to check the VAT rates applicable to each major sector in UAE.

UAE VAT Rates

Supply	Taxable @ 5%	Taxable @ 0%	Exempt	Out of scope
Education
Private and public school education (excluding higher education) and related goods and services provided by educational institutions
Higher education provided by institutions owned by the Government or 50% funded by the Government, and related goods and services
Education provided by private higher educational institutions, and related goods and services
Nursery education and pre-school education
School uniforms
Stationery
Electronic equipment (Tablets, laptops, etc.)
Renting of school grounds for events
After school activities for extra fees
After school activities supplied by teachers and not for extra charge
School trips where the purpose is educational and within the curriculum
School trips for recreation or not within the curriculum
Healthcare
Preventive healthcare service including vaccinations
Healthcare services aimed at treatment of humans including medical services and dental services
Other healthcare services that are not for treatment and are not preventive (e.g. eclectic medicine, cosmetic surgery, etc.)
Medicines and medical equipment as listed in Cabinet Decision
Medicines and medical equipment not listed in Cabinet Decision
Other medical supplies
Oil and gas
Crude oil and natural gas
Other oil and gas products including petrol at the pump
Transportation
Domestic passenger transportation (including flights within UAE)
International transportation of passengers and goods (including intra-GCC)
Supply of a means of transport (air, sea and land) for the commercial transportation of goods and passengers (over 10 people)
Supply of goods and services relating to supply of these means of transport and to the transportation of goods and passengers
Real estate
Sale and rent of commercial buildings
First sale/rent of residential building after completion of construction or conversion
First sale of charitable building
Sale/rent of residential buildings subsequent to first supply
Hotels, motels and serviced accommodation
Bare land
Land (Not bare land)
UAE citizen building own home
Financial services
Margin based products (products not having an explicit fee, commission, rebate, discount or similar)
Products with an explicit fee, commission, rebate, discount or similar
Interest on forms of lending (including loans, credit cards, finance leasing)
Issue, allotment or transfer of an equity or debt security
Investment gold, silver and platinum jewellery
More than 99% pure and tradable in global markets
Less than 99% pure
Jewellery
Insurance and reinsurance
Insurance and reinsurance (including health, motor, property, etc.)
Life insurance and life reinsurance
Food and beverages
Food and beverages
Telecommunications and electronic services
Wired and wireless telecommunications and electronic services
Government activities
Sovereign activities which are not in competition with the private sector undertaken by designated Government bodies
Activities that are not sovereign or are in competition with the private sector	VAT rate depends on the goods and services supplied
Not for profit organizations
Activities of foreign Governments, international organisations, diplomatic bodies and missions acting as such (if not in business in UAE)
Charitable activities undertaken by societies and associations of public welfare which are listed by Cabinet Decision
Activities of other not for profit organizations (not listed in Cabinet Decision) which are not business activities
Business activities undertaken by the above organizations	VAT rate depends on the goods and services supplied
Free Zones
Supplies of goods between businesses in designated zones
Supplies of services between businesses in designated zones	VAT rate depends on the service supplied
Supplies of goods and services in non-designated zones	VAT rate depends on goods or services supplied
Supplies of goods and services from mainland to designated zones or designated zones to mainland	VAT rate depends on the goods or services supplied
Other
Export of goods and services to outside the GCC VAT implementing States
Activities undertaken by employees in the course of their employment, including salaries
Supplies between members of a single tax group
Any supplies of services or goods not mentioned above (includes any items sold in UAE or service provided)
Second hand goods (e.g. Used cars sold by retailers), antiques and collectors’ items	5% of the profit margin