The government has always tried its best to provide the residents of UAE on all possible levels from start till now. Due to the recent VAT implementation, people were kind of confused about how will they carry out the VAT processing and how will they get registered for vat. the government in UAE created s many programmers in order to help the people in learning about VAT and VAT registration in UAE.
A list of supplies has been released by the Federal Tax Authority (FTA) that will be subjected to VAT. Along with these supplies, the list of those supplies was also released which will be exempted from VAT.
Exempted sectors
Those sectors which have been allocated to be the zero-rated include healthcare, education, oil and gas, real estate and transportation sectors.
Exempted supplies for VAT in UAE
The supplies like in that of real estate, financial services and transportation will be exempt from VAT. There are some government activities as well which will be exempt from VAT and these will not be subjected to VAT. Activities that are solely by the government will be exempted from VAT along with the activities by the nation-profit organizations. As vat consultants like Farahat & co explain in this link https://farahatco.com/services/vat-consultants-in-uae/ all details about vat in UAE.
To help you get a complete outline of what is exempt in VAT and what’s not, have a look at the table given below;
Education Sector
|
|
Supplies
| VAT implied
|
school education (public and private) (not including higher education) and goods and services associated
| 0%
|
Government-owned or Government-sponsored Higher education (50% funded) institutes and associated goods and services.
| 0%
|
Education by private higher education institutes, and associated goods and services.
| 5%
|
Pre-school education
| 0%
|
nursery education
| 0%
|
Uniform of school
| 5%
|
Stationery materials
| 5%
|
Electronic equipment
| 5%
|
School rents
| 5%
|
Extra-curricular activities for extra fee
| 5%
|
Educational purpose School trips
| 5%
|
Recreational trips not mentioned in curriculum
| 5%
|
Healthcare Sector
|
|
Supplies
| VAT implied
|
Vaccination
| 0%
|
Medical and dental services
| 0%
|
elective, cosmetic healthcare services
| 5%
|
Medicines and the medical equipment
| 0%
|
Medicines and the medical equipment not mentioned in the Cabinet Decision
| 5%
|
medical supplies (others)
| 5%
|
Oil and Gas
|
|
Supplies
| VAT implied
|
Natural gas crude oil
| 0%
|
Crude oil
| 0%
|
Other gas and oil products including petrol
| 5%
|
Transportation Sector
|
|
Supplies
| VAT implied
|
Transportation services
| Exempt
|
International transportation
| 0%
|
Supply of means of transport
| 0%
|
Supply of goods and services of transport
| 0%
|
Real Estate Sector
|
|
Supplies
| VAT implied
|
Sales of commercial buildings
| 5%
|
Rent of commercial buildings
| 5%
|
First sale/rent of building (residential)
| 0%
|
First sale of building (charitable causes)
| 0%
|
Sale or rent of buildings (residential)
| Exempt
|
Serviced accommodations (hotels, motels etc)
| 5%
|
Bare lands
| Exempt
|
Land which is not bare
| 5%
|
Personal homes of UAE citizens
| 5% (can be recovered)
|
Financial Services
|
|
Supplies
| VAT implied
|
Margin based products
| Exempt
|
Products with explicit fee, commission, discount, rebate or similar element
| 5%
|
Interest on different forms of lending
| Exempt
|
Issue, allotment or transfer of equity or debt security
| Exempt
|
Investment of gold, silver and Platinum, Jewellery
|
|
Supplies
| VAT implied
|
99% or purer form and worthy of trade in global markets
| 0%
|
< 99% pure
| 5%
|
Jewellery
| 5%
|
Insurance / Reinsurance
|
|
Supplies
| VAT implied
|
Insurance and reinsurance
| 5%
|
Life insurance
| Exempt
|
life reinsurance
| Exempt
|
Food and beverages
|
|
Supplies
| VAT implied
|
Food and beverages
| 5%
|
Telecommunications and other electronic services
|
|
Supplies
| VAT implied
|
Wireless telecom and electronic facilities
| 5%
|
Wired telecom and electronic facilities
| 5%
|
Government Activities
|
|
Supplies
| VAT implied
|
Sovereign activities not in competition with private sector taken on by designated government units
| Considered outside framework of VAT
|
Activities not considered sovereign
| VAT rates dependent on service or good
|
