UAE VAT Rates- Handbook

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Tally Solutions, Feb-05-2020

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      

You can download vat rate handbook (pdf file) and start using it right away! Download

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