How the VAT is Imposed in Health and Education Fields in Dubai

Updated on Thursday 25th January 2018

The tax regime for countries which are part of the Gulf Cooperation Council has suffered a few modifications, the most important one being connected to the VAT starting with January 2018. The financial authorities also planned several exemptions for varied sectors like health and education. If your firm operates in one of these fields, and you need to understand the new tax structure, we strongly recommend you talk to one of our accountants in Dubai. Our experienced team can also offer audits in Dubai.

VAT clarifications for certain sectors in Dubai

According to the UAE Federal Tax Authority, the health and education sectors are subject to a particular tax regime regarding the value added tax. In this matter, companies should align with the new terms and conditions and consider the VAT in the following matters:
0% VAT rate for services and treatments offered by a healthcare institution;
0% VAT rate for approved medications by the Ministry of Health and Prevention;
0% VAT rate for medical supplies;
5% VAT rate for non-preventive treatments offered in Dubai’s clinics and health centers;
5% VAT rate for medicines which are not approved by the Ministry of Health and Prevention.
Because the healthcare system in Dubai is well-developed in the UAE, the VAT relaxation is in accordance, but with the exemptions above-mentioned.

How VAT is levied in the education sector

Another important field in the UAE is represented by education. The VAT is imposed under certain conditions and for particular categories, among which we remind the following:
0% VAT rate for school education (nursery, pre-school);
0% VAT rate for printed and digital books used in schools;
0% VAT rate for higher education offered by the government-owned institution (more than 50%);
0% VAT rate for school transportation in Dubai;
5% VAT rate for school uniforms and electronic equipment existent in such institutions;
5% VAT rate for after-school activities;
5% VAT rate for school trips;
5% VAT rate for food and drinks offered to students in the campus.
Because the VAT was extremely debated by authorities in the UAE, companies had to rapidly align with the new tax conditions. Fortunately, in sectors like health and education, exemptions are welcomed, giving credits and encouragements to foreigners who want to do business in such fields.
If you need to understand better the new tax regime in the UAE, please feel free to contact our accounting firm in Dubai.