VAT Rates for Different Industries as per Auditors in UAE

07

Aug 2020

On 1^st Jan 2018, the government of UAE has taken a step forward to increase the revenue sources in the nation by implementing the VAT system at a rate of 5 percent on the taxable supply of goods and services at every point in the supply chain. Any business entity that holds taxable supplies and imports of AED 375,000 must proceed ahead with the VAT registration process. On the other hand, business entities holding a value of AED 187,500 have got an option to register.

The implementation of the VAT scenario had an impact on different industries, and this article contains the VAT rates applicable to each sector. If you are a business owner or an entrepreneur who has got a business in UAE or is planning to start one, then you should be aware of the charges.

Education

Description	VAT Rate
Private and public school education (excluding higher education) and related goods and services provided by an educational institution	0%
Higher education provided by institutions owned by the government or 50% funded by the government, and related goods and services	0%
Education provided by higher educational institutions, and related goods and services	5%
Nursery education and pre-school education	0%
School uniforms	5%
Electronic equipment (tablets, laptops, etc.)	5%
Renting of school grounds for events	5%
After school activities for an extra fee	5%
School trips where the purpose is education and within the curriculum	0%
School trips for recreation or not within the curriculum	5%

Healthcare

Description	VAT Rate
Preventive healthcare services including vaccinations	0%
Healthcare services aimed at the treatment of humans including medical services and dental services	0%
Other healthcare services that are not for treatment and not for preventive (e.g. elective, cosmetic, etc.)	5%
Medicines and medical equipment as listed in Cabinet Decision	0%
Medicines and medical equipment not listed in Cabinet Decision	5%
Other medical supplies	5%

Oil and Gas

Description	VAT Rate
Crude oil and natural gas	0%
Other oil and gas products including petrol at the pump	5%

Transportation

Description	VAT Rate
Domestic passenger transportation (including flights within UAE)	Exempt
International transportation of passengers and goods (including intra-GCC)	0%
Supply of a means of transport (air, sea, and land) for the commercial transportation of goods and passengers (over ten people)	0%
Supply of goods and services relating to these means of transport and the transportation of goods and passengers	0%

Real Estate

Description	VAT Rate
Sale and rent of commercial buildings (not residential buildings)	5%
First sale/rent of residential building after completion of construction or conversion	0%
The first sale of a charitable building	0%
Sale/ rent of residential buildings after the first supply	Exempt
Hotels, motels, and serviced accommodation	5%
Bare land	Exempt
Land (not bare land)	5%
UAE citizen building own home	5% (recoverable)

Financial Services

Description	VAT Rate
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%
Interest on forms of lending (including loans, credit cards, finance leasing)	Exempt
Issue, allotment, or transfer of equity or debt security	Exempt

Investments in Gold, Silver, Platinum, Jewellery

Description	VAT Rate
>= 99% pure and tradable in global markets	0%
< 99% pure	5%
Jewelry	5%

Insurance and Reinsurance

Description	VAT Rate
Insurance and reinsurance (including health, motor, property, etc.)	5%
Life insurance and life reinsurance	Exempt

Food and Beverage

Description	VAT Rate
Food and Beverage	5%

Telecommunications and Electronic Services

Description	VAT Rate
Wired and wireless telecommunications and electronic services	5%

Other

Description	VAT Rate
Export of goods and services to outside the GCC implementing states	0%
Activities are undertaken by employees in the course of their employment, including salaries	Considered outside the VAT Purview
Supplies between members of a single tax group	Considered outside the VAT Purview
Any supplies of services or goods not mentioned above (includes any items sold in the UAE or service provided)	5%
Second-hand goods like used cars sold by retailers, antiques, etc.	5% (profit margin scheme may apply)

VAT Return Filing is an important task that needs to be completed every financial year to get an accurate amount of how much VAT is to be paid or reimbursed by the Tax Authorities. The tax calculation needs to be accurate, and any error in the process might delay the reimbursement process. Business owners and investors prefer to outsource the VAT proceedings as it eases the process. Are you wondering how they can help you? Your answer is right below.

Why Avail Professional VAT Services?

VAT experts can help you in the following ways:

Handle the VAT proceedings in a smooth way
VAT Return Filing is maintained accordingly
Errors in the business books get highlighted
Eases the audit process

JAXA Chartered Accountants serve as one of the best VAT consultants in the UAE. Since its inception, the entity has helped multiple business professionals to settle their VAT proceedings accordingly. Our VAT experts hold industry experience that allows them to provide tailored solutions. If you are looking forward to implementing VAT services in your organization, do have a word with us. Contact us today-we’d be glad to assist.