VAT in the UAE: What Will And What Won’t Be Taxed

On August 27th, President of the United Arab Emirates, His Highness Sheikh Khalifa bin Zayed Al Nahyan, issued the federal decree law no. 8 of 2017 regulating the value-added tax (VAT).

Starting January 2018 and at a standard 5%, the UAE will have one of the lowest VAT rates.

All supplies of goods and services are subject to VAT at the same rate, with the exception of specific items which will be exempted or taxed at zero %.

We guide you to the goods that will be subjected to zero tax:

Exports

All goods and services that are exported to countries outside the VAT-implementing GCC states.

International transportation of passengers or goods, including a transfer starting or ending in the U.A.E. or passing through its territory.

Air transfer of passengers in in the UAE will also incur zero rates if it is categorized as “international carriage”.

Your Gold investments will not be taxed

The supply or import of investment-precious metals will be taxed at a zero percent rate.

Rent will be taxed at Zero %

First supply of residential buildings within 3 years of its completion, either through sale or lease in whole or in part will be taxed at zero% rate.

The first supply of buildings specifically designed to be used by charities and buildings converted from non-residential to residential will also be taxed at the same zero% rate.

School and tuition fees will not go up

The supply of educational services and related goods and services for nurseries, preschool, elementary education won’t be taxed.

Higher educational institutions owned or funded by the federal or local government won’t be subjected to VAT either.

Private higher educations are likely to be taxed.

The visits to your doctor will not cost more

The supply of preventive and basic healthcare services and related goods and services, as specified in the executive regulation will not be subjected to VAT.

Other supplies

The supply of residential (non-zero-rated) buildings either by sale or lease, the supply of bare land, and local passenger transport will also be exempt.

Leave a Reply

Your email address will not be published. Required fields are marked *
You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>