VAT in the UAE: what’s going to be affected

The 5 percent tax on goods and services is now here

VAT in the UAE: what’s going to be affected

The New Year is here – and so is the new VAT. Up until now it’s been a bit unclear about what will be taxed, that is until today.

The Federal Tax Authority has released the list of everything that will be subject to the 5 percent tax.

It has also released details of what will be zero rated (meaning you, as the consumer won’t have to pay any tax) and what will be completely exempt from the charge.

Read below for the full list.

Food and Beverages
Food and beverages: 5 percent.

Domestic passenger transportation (including flights within UAE): Exempt

International transportation of passengers and goods (including intra-GCC): 0 percent.

Supply of a means of transport (air, sea and land) for the commercial transportation of goods and passengers (over 10 people): 0 percent.

Supply of goods and services relating to these means of transport and to the transportation of goods and passengers: 0 percent.

Preventive healthcare services including vaccinations: 0 percent

Healthcare services aimed at treatment of humans including medical services and dental services: 0 percent.

Other healthcare services that are not for treatment and are not preventive (elective, cosmetic, etc): 5 percent

Medicines and medical equipment as listed in Cabinet Decision: 0 percent

Medicines and medical equipment not listed in Cabinet Decision: 5 percent

Other medical supplies: 5 percent

Private and public school education (excluding higher education) and related goods and services provided by education institution: 0 percent

Higher education provided by institution owned by government or 50 percent funded by government, and related goods and services: 0 percent

Education provided by private higher educational institutions, and related goods and services: 5 percent

Nursery education and pre-school education: 0 percent

School uniforms: 5 percent

Stationery: 5 percent

Electronic equipment (tablets, laptops, etc): 5 percent

Renting of school grounds for events: 5 percent

After-school activities for extra fee: 5 percent

After-school activities supplied by teachers and not for extra charge: 0 percent

School trips where purpose is educational and within curriculum: 0 percent

School trips for recreation or not within curriculum: 5 percent

Oil and gas
Crude oil and natural gas: 0 percent

Other oil and gas products, including petrol at the pump: 5 percent

Real Estate
Sale and rent of commercial buildings (not residential buildings): 5 percent

First sale/rent of residential building after completion of construction or conversion: 0 percent

First sale of charitable building: 0 percent

Sale/rent of residential buildings subsequent to first supply: Exempt

Hotels, motels and serviced accommodation: 5 percent

Bare land: Exempt

Land (not bare land): 5 percent

UAE citizen building own home: 5 percent (recoverable)

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 percent

Interest on forms of lending (including loans, credit cards, finance leasing): Exempt

Issue, allotment or transfer of an equity or debt security: Exempt

Gold, Silver and Platinum
Over 99 percent pure and tradable in global markets: 0 percent

Less than 99 percent pure: 5 percent

Jewellery: 5 percent

Insurance and reinsurance
Insurance and reinsurance (including health, motor, property, etc): 5 percent

Life insurance and life reinsurance: Exempt

Wired and wireless telecommunications and electronic services: 5 percent

Export of goods and services to outside the GCC implementing states: 0 percent

Activities undertaken by employees in the course of their employment, including salaries: Considered outside the VAT system

Supplies between members of a single tax group: Considered outside the VAT system

Any supplies of services or goods not mentioned above (includes any items sold in the UAE or service provided): 5 percent

Second hand goods (eg used cars sold by retailers), antiques and collectors’ items: 5 percent

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